Procurement update: increasing productivity

8 Bishopsgate

Design, procurement and construction processes have become more complex over time, and the added complications of covid-19 and Brexit have piled on the pressure. Steve Watts of Alinea examines in detail the factors affecting productivity and considers how we can bring about improvements to get more for less

01 / Introduction

Life has become ever more complicated, and property development is no exception. It has always been an endeavour with finely balanced risks and rewards, and in which profitability is influenced by a range of factors, some easier to control and predict than others. The graph below of prime City of London rents, capital values and construction price inflation over the last 30 years shows office development in the capital has faced ever‑increasing cost pressures and values that have been supported by yield compression.

The need to create better buildings, using a widening definition of quality, against ever more restrictive constraints on the supply chain, means the whole process of briefing, design and construction needs to be more efficient and certain, so that all parties involved can enjoy more consistent rewards.

One of the sectors weathering covid-19 well, even thriving through it, is technology – Nasdaq, a tech-heavy stock index, has leapt by 40% this year. Technology has often been seen as the saviour of productivity, yet back in the late 1980s Robert Solow, a Nobel Prize-winning economist, said that “you can see the computer age everywhere but in the productivity statistics”. Unfortunately, those statistics have not fared any better since, despite more powerful computers and better software being more readily available and at lower prices.

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