CATEGORY | Productivity

Determining the profitability of a construction project is straightforward: it’s simply the difference between what a contractor gets paid to complete a project, less what it costs them to do so. When contractors create budgets for their projects, they have to estimate the cost and profit margin for every item of work they must perform. This includes materials, equipment, supplies, overhead expenses and of course – the cost of labor. Given that the vast majority of projects depend heavily on those who physically perform the work, it only makes sense that labor costs on most projects is substantial. It’s not uncommon for labor costs to make up the majority of a project’s total budget. The more efficient and productive the crews onsite work, the more profitable a project is. But how is this productivity calculated? How can construction managers and supervisors know whether or not the workers are meeting the budget? What if some items are going better than estimated, while others are doing worse? This is why tracking construction productivity on a regular basis is so important. Let’s go through a few examples of how to track construction productivity using an Excel template, which you can download for free below!