Economic development and construction productivity in Malaysia

Abstract

The productivity of the construction industry has a significant effect on national economic growth. Gains from higher construction productivity flow through the economy, as all industries rely on construction to some extent as part of their business investment. Contractions and expansions of economic activity are common phenomena in an economy. Three construction cycles occurred between the years 1970 and 2011 in Malaysia. The relationships between construction productivity and economic development are examined by the partial correlation method to establish the underlying factors driving the change in construction productivity. Construction productivity is statistically significantly correlated with gross domestic product (GDP) per capita in a positive direction for the 1985-98 and 1998-2009 cycles, but not the 1970-85 cycle. Fluctuations in construction activities and the influx of foreign workers underlie the changes of construction productivity in the 1985-98 cycle. There was less fluctuation in construction activities in the 1998-2009 cycle, with changes being mainly due to the fiscal stimulation policies of the government in attempting to stabilize the economy. The intensive construction of mega-projects resulted in resource constraints and cost pressures during the 1980s and 1990s. A better management of the 'boom-bust' nature of the construction business cycle is required to maintain the capability and capacity of the industry.

Construction productivity and construction project performance in Indian construction projects

“…Completing projects in a predictable manner of time (within schedule) is one of the important indicators of project success. Cost overrun is one of the most frequent problems with construction projects and contractors are criticized for the common occurrence of cost overrun in construction projects, [36], [37]. There are some other factors which also contribute to the cost overrun such as profit of the project, project design cost, and wastage of materials, construction productivity, cost of variation orders and cost of rework.…”

Productivity Distribution and Drivers of Productivity Growth in the Construction Industry

“…Country, data source, time frame Method/Design Findings Chia et al (2014), "Economic development and construction productivity in Malaysia"…”

Productivity as a Determinant of Labour Wage in New Zealand’s Construction Sector

“…Since this sector influences the growth of national economy, its productivity level is of critical importance. Studies have proved that the higher the productiv-ity level of the construction sector, the higher the gains for other sectors, since the former feeds investments into the latter to some extent (Chia, Skitmore, Runeson, & Bridge, 2014).…”

“…The relationship of the construction sector with the economy has received attention from researchers worldwide. Numerous studies have examined and reported the relationship between construction sector output and the economy (Banaitienė, Banaitis, & Laučys, 2015;Chan, 2001;Giang & Low, 2011;Ma, Liu, & Reed, 2017;Ofori, 1990;Turin, 1978), while several others (Chia et al, 2014;Y. Gang, F. Gang, & Yan, 2003) have examined the relationship between this sector's productivity performance and economic development.…”