Improved client and contractor satisfaction but profits fell in 2015, construction KPIs reveal

2015 KPI report results are in Client and contractor satisfaction improved but profits fell in 2015

The latest UK Industry Performance report compiled by Glenigan finds rising levels of client and contractor satisfaction on projects completed last year. The analysis also finds that project predictability has improved, but profitability has taken a hit and productivity growth has been modest.

The 2016 UK Performance Report, supported by CITB, paints a broadly positive picture for construction during a period of slowing but steady growth. The KPIs point to an industry working hard to maintaining recent levels of performance and client satisfaction.

Indeed both client and contractor satisfaction improved significantly with 85% of clients rating their 'overall satisfaction with the finished product' as 8 out of 10 or higher – a 4 percentage point increase that reverses a declining trend of the last three surveys. Contractor satisfaction with the performance of the client and consultancy teams also rose to 74% - up from 69% in the previous survey.

Accurate predictability of projects improved overall, but costing forecasts fared better than allocated time predictions. Sixty four per cent of projects came in on budget – a rise from the previous survey high of 59% in 2011. But only 41% of projects came in on time and the predictability of the design phase slipped to 48% from 53% from last year.

Increasing labour and material costs meant that industry profitability took a hit, dropping from 2.8% to 2.5%. And though productivity increased by 2.5% in real terms, it is still well below levels reported in 2011 when employers were making more efficient use of a slimmed down workforce.

Training levels increased from 1.2 to 1.5 training days and the take up of CSCS cards strengthened, with 75% of employees holding a card, up from 55% in 2014. Staff turnover slowed to 2.7% but more firms are reducing the size of their workforce. The average firm lost 7.0% of their direct employees – up from 6.3% in last year's report.

Overall the latest survey results reveal an industry working hard to meet clients' expectations and progressively improving its performance across a wide range of economic, social and environmental measures. The construction industry is presently potentially facing a period of volatile workloads and structural change as the UK economy adapts to life outside of the EU. This will require the industry to redouble its efforts to upskill the workforce, enhance productivity and contain costs.