Using Purchasing Power Parity to Assess Construction Productivity

Rick Best


Abstract

For many reasons comparing construction productivity between countries is a difficult task. One key problem is that of converting construction costs to a common currency. This problem can be overcome relatively simply by using a basket of construction materials and labour, termed a BLOC (Basket of Locally Obtained Commodities), as a unit of construction cost. Average BLOC costs in each location are calculated from data obtained from a number of sources (quantity surveyors, estimators). Typical building costs obtained from published construction cost data are expressed in BLOC equivalents. Lower BLOC equivalents represent higher productivity as other inputs (largely materials) are constant. The method provides a relatively simple and direct method for comparing productivity between different locations.

 

Keywords

International construction; industry comparisons; purchasing power parity; construction productivity

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