few decades ago

Since the early 1970s, U.S. construction labor productivity has been stagnant, while other industries have seen significant gains. Over the past half-century, construction output per worker has remained comparable to the levels seen in 1948. This stagnation, highlighted in multiple studies, has drawn skepticism from some economists who argue it may be due to measurement flaws.

However, correcting for factors like subcontractors and undocumented workers would only exacerbate the decline, not reverse it. The issue likely stems from construction's unique deflation process, where price indexes heavily influence productivity calculations. While some argue these price deflators might be biased, the evidence suggests this bias is insufficient to explain the productivity gap.

The construction sector's contribution to GDP remains substantial, accounting for nearly 4.5% of the economy in 2024. Its importance as a builder of infrastructure and housing means productivity issues in this sector can reverberate throughout the broader economy. Economists estimate that sustained productivity decline in construction has cost the U.S. over $1 trillion in lost growth since the 1970s.