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The analysis of the labor productivity of the workforce and the utilization of material and equipment are major factors in determining whether a construction project will be completed on time and within budget. Concerning the project budget, every construction project should have a budget established prior to the commencement of work. The contractor’s goal should be to complete the project within the time frame and at the costs established in the budget. After construction has begun, an analysis of the project costs for materials, equipment, and labor should be performed on a periodic basis. Evaluating the material and equipment usage is relatively straightforward; however, there are multiple components within the construction process affecting labor productivity that must be considered when performing a labor productivity analysis. This paper describes many of these components and their effect on labor productivity. Regardless of whether the contractor is tracking the budget for the project, a labor productivity analysis must be performed. Also discussed are the many recommended methods for estimating lost productivity as well as the various methodologies that can be used to develop an analysis.


For a contractor to be successful on a project, everything needs to go well. The contract drawings need to be well prepared; changes need to be properly managed; weather conditions must be planned for; skilled and unskilled labor must be available and productive; supervision needs to be effective; government and regulatory requirements understood; materials, equipment, and supplies available; the site conditions adequate; and intangible factors such as morale, fatigue, and labor turnover maintained at acceptable levels. How often on a project has each of these components gone well?

Most, if not all, of these components affect a project’s labor productivity. When a contractor budgets, or bids, a construction project, it generally bases its budget on historical data. However, no two projects are exactly alike. Designs change, locations are different, and other factors affect how this historical data applies to the project being budgeted. Therefore, each new project requires its own budget, or baseline, for labor, materials, and equipment. The most important is the labor utilization baseline. Generally, there are several labor baselines throughout a project. A baseline for the beginning and ending of a project, as well as an analysis of the progression of the job.

Once a project is progressing, the actual labor utilization for various phases should be compared to the same phases in the projected labor baselines. This is accomplished by performing a labor productivity analysis. These productivity analyses can be performed during the project, or after the project is completed. If, throughout the project duration, delays and disruptions occur, a productivity analysis should be performed to determine the effects those delays and disruptions had on the project. If certain delays and disruptions were caused by the owner or a responsible third party, the damages suffered as a result of the productivity loss may be recoverable. 

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