Basic methods of measurement

The construction industry produces a variety o f different types o f buildings and works that are of

different sizes and value, and adopting different methods o f construction. It also employs a wide

range o f manpower and professionals of which the numbers and mix varies with time. Hence, the

complex nature o f the industry renders the adoption o f a single method o f measuring its

performance impossible. The following are several basic methods used for measuring

1) Number

In terms o f measuring the industry's output to assess its performance, this methods of

measurement is the simplest as it only involves counting the number o f items constructed for

each type o f construction within a chosen time period. However, owing to its simplicity, vital

information is left out such as the size, value and quality o f the projects. By looking at numbers

alone, the performance o f the industry may be misjudged. For example, it would be misleading

to base the industry's performance solely on the number o f projects undertaken. The total

contract value may be high even though the number o f projects is small. Effectively, the high

project value contributes more to the GDP, indicating higher value added in construction. Ofori

(1990) also views numbers as an impractical system for measuring construction output owing to

the wide variety o f types o f construction and their different sizes and methods o f construction.

However, when assessing performance based on the amount o f manpower employed, the use o f

numbers is a common method o f measurement. A large number o f workforce employed in

construction usually implies a healthy and booming industry.

2) Gross floor area

When measuring output, gross floor area is regarded as a more realistic measure because it identifies a significant quantifiable attribute o f each type o f construction (Ofori, 1990).

Specifically, it gives an idea o f the size or magnitude o f the items o f construction. However,

when comparison between different types o f construction is required, this measure raises some

problems since a square metre of floor area o f a factory cannot be compared with that o f a

school. In fact, two buildings o f the same type are seldom wholly comparable. Similarly, this

measure does not provide information on the materials used and methods o f construction or the

overall height and individual storey heights.

3) Index number

This is a relative measure and is expressed as a percentage o f a single base figure. It is

commonly used to measure changes in the costs or prices o f construction output over time, with

reference to a base year figure. The problems associated with this measure again arises from the

extremely varied nature o f the work carried out by the construction industry. Since each project

single standard o f comparison. New construction projects vary not only in type but also in size,

design, specification, complexity and methods o f construction. Even similar projects vary

according to differences in site conditions with a consequential influence on costs o f construction.

Besides, the considerable period o f time that construction projects often take from start to finish

also means that costs may be measured at different stages of the process. Clearly, measurements

which relate to different stages may be expected to differ and likewise the rates o f change over

time o f such measurements may not be equivalent. In response to these problems, various

methods o f constructing indices have been employed and a variety o f different index series have

been devised. Often, two or more indices are combined to form one composite index. The most

straightforward way o f combining indices is to calculate a weighted average o f the indices used.

4) Volume and value

These are two commonly used monetary measures o f construction output. Ofori (1990) regards

money as the most convenient measure o f construction output, one that provides a simple means

o f comparison. Effectively, a higher volume or value o f construction output implies better

performance. A direct relationship can also be implied between projects attributes such as

quality, size, construction method and monetary measures. For instance, a larger project using higher quality materials and adopting more advanced method o f construction would incur higher

costs. However, there is one main problem associated with using monetary measures, that is, the

effects o f inflation. In general, costs are influenced by the level o f prices in a country's economy,

the industry's efficiency and the difficulties in its operating environment. These factors not only

change over time within each country, but are also different among countries. They hinder

comparisons o f output in the same country over time, as well as that among different countries.

In view o f this problem, the concept o f volume and value is developed. Volume is a measure

o f output in constant price while value is that of output in actual market price (The Economist,

1994). Therefore, a volume indicator provides information about changes in volumes and not

prices, and value is volume multiplied by market price. In practice, a deflator is normally used to

adjust data on each sector o f the economy to allow for the effect o f inflation. However, some

researchers (Dacy, 1965: Rosefielde and Mills, 1979: and Stokes, 1981) noted that official

deflator indices do not entirely capture qualitative changes in output, and tend to under-estimate

construction output, and hence, productivity. Besides, within a country, output in monetary

workload, levels o f capital utilisation and other related factors.

Despite these shortcomings, monetary measures are still widely adopted and are often

supplemented with data provided in other forms, such as floor areas o f buildings, number of

rooms for hotels, number o f beds for hospitals, lengths o f roads and others.