Optimising infrastructure productivity

Productivity is a trending news story when it comes to the engineering and construction industry lately. But what does it mean?

Productivity is the amount of output of goods and services produced per unit of input, such as labour, capital and raw materials, used to produce those goods and services. Productivity growth is the primary driver for our increased living standard in Australia. It can be measured at a project, organisation, industry or economy level, usually in one of two ways:

• Labour productivity: the ratio of output to hours worked.
• Multifactor productivity: the ratio of output to combined input of labour and capital.
  
  

Many factors can affect productivity growth, including technological improvements, workforce skills, management practices, changes in other inputs (such as capital) and competitive pressures.

Growing productivity

So, why is productivity growth important for us?

Infrastructure Australia’s 2024 Infrastructure Market Capacity Report highlights several challenges affecting productivity in Australia’s infrastructure sector. The report identifies stagnating productivity growth as a key issue, alongside skills shortages and rising material costs, which are making it difficult to deliver projects on time and within budget.¹

Addressing concerns

To address these concerns, the report recommends industry focus on the following:

• Active demand management to ensure projects are planned efficiently.
• Boosting material supply to mitigate rising costs.
• Boosting workforce supply to tackle skills shortages.
• Improving construction productivity through better risk allocation and more collaborative project delivery.²
  
  

The report also notes that construction materials now cost around 30 per cent more than three years ago, and ongoing workforce shortages have led to project delays affecting $15 billion worth of planned construction work.³

Infrastructure Australia emphasises the need for reforms in construction productivity, including adopting Model Client behaviours, Digital by Default approaches, and cultural reform to attract and retain skilled workers.⁴

Getting more for less

With that said, if we are to deliver a net zero transition, an Olympics, and provide for a rapidly growing and ageing population, engineering and construction must get more from less to maintain our standard of living.

The productivity of the engineering and construction industry has been lagging other sectors, despite advancements in digitalisation and automation.⁵

• Global construction productivity has only improved by 10 per cent between 2000 and 2022, which translates to an annual growth rate of 0.4 per cent. This is far below the two per cent annual productivity growth seen across the broader economy.⁶
• In Australia, multifactor productivity in the construction industry was 1.6 percent lower in FY2022 than in FY1990. This means the sector has experienced an average decline of -0.05 per cent per annum over the past three decades.⁷
• A survey conducted in 2023 found that only nine per cent of respondents globally expected productivity to increase in the following 12 months.⁸

We are facing challenges such as skills shortages, rising material costs, and slow adoption of digital tools, which continue to hinder productivity growth.

But if we are to improve our productivity, we must be able to measure it…consistently!

According to the Reserve Bank of Australia, productivity is calculated by dividing output by inputs, where output refers to a quantity of goods and services produced in a period.

Last Planner and calculating productivity

So how can we calculate productivity on our projects you might ask?

The Last Planner is one method that is used here at Marvel. Put simply, weekly work planning that involves all key project team members identifying what tasks (inputs) are required to be completed within the upcoming week. The plan is then reviewed at the end of the week to determine what tasks were completed (outputs) and why others were not. By dividing the number of completed tasks by the number of planned tasks we can then determine our Percent Planned Complete (PPC).

Continuous improvement

While this method may appear to be unsophisticated, it provides valuable insights for project teams on a weekly basis that enables continuous improvement to increase the projects PPC. Imagine if this was applied to all infrastructure projects with executive leadership teams required to report their PPC monthly? If the benchmark for such a Key Performance Indicator (KPI) was 70 per cent, anything below this mark would trigger action, giving project teams plenty of time to implement mitigation measures and keep projects on time and on budget.

Improving productivity

Now that we know how to measure productivity, how can we improve it?

This depends on where our project sits within the infrastructure project lifecycle. Understanding that a procurement process is required to engage industry within the lifecycle (and represents a huge opportunity for productivity gains), Marvel’s ‘Productivity Optimisation Framework’ has been designed with a focus to better manage change, strengthen innovation, increase digital adoption, and embed sustainable practices for projects that are being delivered by industry.

It can be applied by project teams at any stage progressing along the lifecycle journey. The framework provides a roadmap for how to implement productivity improvements during onboarding, execution and finalisation of any infrastructure project with a focus on:

• Accountability – knowing your role and owning it.
• Communication – understanding your audience and tailoring your messages.
• Continuous improvement – learning from experiences and increasing productivity.
• Consistency – do it right, do it once.

Focusing on the day-to-day

For industry, a focus on these simple, day-to-day activities can be the key ingredients to efficient project delivery:

• Structure – Breaking projects down into smaller, more manageable packages helps organise week-to-week work planning and delegates ownership and accountability.
• Meeting acumen – Establish a schedule of recurring meetings, be responsible for preparing agendas and materials, respect other people and keep to time, record the outcomes, initiate the actions.
• Value feedback – Receiving feedback (both positive and negative) at agreed milestones helps all stakeholders successfully achieve project objectives. When responding to feedback, remember the three C’s – clear, concise and complete with no open-ended statements.
• Processes – Implement processes at the start, follow the process, repeat the process, don’t try and short-cut the process. Consistency smooths the flow of information and increases efficiency.

The approach can also be embraced and applied by any stakeholder delivering infrastructure projects including contractors, consultants and infrastructure authorities (clients).

Focuses for infrastructure authorities

Some initiatives that infrastructure authorities can focus on during deliver to improve productivity include:

• Defining roles and responsibilities – This enables clear lines of communication and delegation of authority, leading to efficient and effective decision making.
• Onboarding client team and stakeholders – Embeds accountability, builds awareness of project requirements and emphasises the importance of following processes consistently.
• Exchange key information – Sharing key information such as site conditions, permits and approvals as early as possible. This provides the greatest opportunity for value for money solutions.
• Capture and share lessons learned – Helps industry learn from others, builds knowledge and capability and creates an environment of continuous improvement.

If our industry can collectively focus on improving productivity, we can increase the number of infrastructure projects built without any additional funding. At Marvel, we believe implementing these initiatives on any infrastructure project gives us the best chance of successful delivery… while having fun at the same time!

If you’re curious as to how this framework can be implemented on your project, please reach out to us to learn more!

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^{[1] Infrastructure Australia, 2024}

^{[2] Consult Australia, 2024}

^{[3] Infrastructure Magazine, 2025}

^{[4] Consult Australia, 2024}

^{[5] RICS, 2024}

^{[6] McKinsey & Company, 2024}

^{[7] BIS Oxford Economics Australia, 2023}

^{[8] RICS, 2024}

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