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    Europe’s Construction Sector Faces Productivity Crisis, Reveals PlanRadar Study

    Productivity in the European Union’s construction sector has not only stagnated but actually decreased since 1995, despite a 40% overall economic growth in the region. The detailed findings emerge from a research report by PlanRadar, titled “Productivity and Labor Efficiency in the Construction Industry 2024,” which analyzes ten European markets, including Poland.

    The survey, involving 450 industry practitioners across various European nations such as Germany, Austria, Switzerland, Poland, Hungary, Czech Republic, Croatia, Romania, Slovakia, and Serbia, highlights a concerning trend: while productivity in general manufacturing within the EU has seen an 80% increase from 1995 to 2021, the construction sector has lagged behind, still underperforming compared to levels from over a quarter-century ago. This decline comes at a time when demand for new investments is growing, putting the industry in a precarious position due to a critical labor shortage.

    Currently, nearly 14 million people are employed in the construction sector across the EU. The study suggests that a potential increase in productivity by 20% could lead to 2.5 million new jobs, effectively resolving the labor shortage crisis. However, the question remains: how can this be achieved?

    Insights from the Field: Low Wages, Poor Motivation

    According to the report, a significant barrier to improving productivity is the sector’s struggle with low wages and poor working conditions, making it less attractive as a career option. This has led to a vicious cycle where low productivity results in delays and less profitability, further depressing wages and worker morale. Almost half of the surveyed workers (48%) believe that poor motivation due to low pay is a key factor in the industry’s productivity struggles.

    Regional Challenges and Potential Solutions

    The survey also sheds light on the specific challenges faced by different regions. For instance, respondents from Central and Eastern Europe believe that enhancing skills, particularly in project management, could lead to better wages and improved productivity. Moreover, 43% of respondents suggest that higher productivity could save 10-20% of an investment’s budget.

    In Poland, 60% of workers point to the excessive number of simultaneous tasks as a primary reason for low productivity. Other issues include unclear processes and inadequate communication among project stakeholders, compounded by a lack of skilled workforce.

    A Way Forward

    Krzysztof Studziński, Regional Manager Poland at PlanRadar, emphasizes the importance of better work organization and thorough documentation of ongoing tasks to quickly identify and mitigate emerging problems. “Correct documentation allows immediate recognition of issues, swiftly addressing them and mitigating their consequences,” says Studziński.

    With the global market value of the construction sector expected to reach $13.9 trillion by 2037, up from $9.7 trillion in 2022, addressing these productivity challenges is crucial. The industry must break the cycle of inefficiency to meet the rising demand for new constructions and ensure its future sustainability.

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