What Metrics Tell About the Project Performance of the Finnish Construction Sector

finnish construction site

In many international comparisons, Finland’s construction sector comes out as reputable. In terms of job site safety and prevention of unreported employment, Finland shines. However, there’s still room for improvement in other business areas, as a new study shows.

In 2020, Aalto University revealed exciting data on the project performance of Finnish construction companies. Eelon Lappalainen, a doctoral student, reported the results to the Building 2030 consortium‘s CEO group in spring 2021.

The consortium consists of Aalto University – its initiator – and 21 construction sector companies. It aims to make the Finnish construction sector the most reliable in the world. 

To achieve its vision, Building 2030 funds research on and experiments with the use of new technologies and lean construction methods on construction sites.

Making the vision measurable

Building 2030 has defined a vision with five themes: reliability, user orientation, sustainability, productivity, and inspiration. Each theme has goals but initially did not have numerical metrics, except for sustainability. In 2030, CO2 emissions should be down 50% from the level in 2018.

After some discussion within the CEO group, the consortium decided to choose a few metrics for each vision element. The aim is to measure these elements annually using data retrieved from the member companies.

Five construction companies with a total value of about 1.1 billion euro for the projects under review took part in the measurement. Design companies did not participate in the first survey.

The material covered 55 general contracts and three subcontracts. Of the projects, 31 were commercial construction, 24 were housing, and three were smaller infrastructure projects. The project size ranged from approximately 0.4 million euro to 300 million euro. The median budget of the projects was 10 million euro.

Construction project performance metrics

Still room for improvement in reliability

In a global comparison, the reliability of Finnish construction businesses seems to be in reasonably good shape, but there is still room for improvement.

36.2% of the projects examined achieved an error-free handover, while 60.3 % did not. (Information was not available for the remaining 3.4%.) All infrastructure projects succeeded in this respect, but only a quarter of the commercial construction projects did.

The number of accidents at work in Finland has decreased dramatically from previous years. It is now realistic to aim for an accident-free construction site. In this study, 53.4% of all projects and 70.8% of residential projects were completed without any accidents. Accidents tend to occur frequently on a few particular construction sites. Thus, there are either a relatively large number of accidents at a site or no accidents at all.

Completion of the site on schedule and budget is still an unresolved challenge for construction. In this measurement, only about half of the residential and commercial projects met their budget targets. On the other hand, projects succeeded better in keeping to the schedule; 81% of all the projects measured managed to do that.

Metrics for user orientation and sustainability 

How to measure user orientation? The CEO group decided to use the share of collaborative projects as a yardstick.

83.3% of the surveyed residential properties were not collaborative, while slightly more than half of commercial projects were. Due to their smaller size, the infrastructure projects examined were not collaborative, although the model is typical in that sector.

The consortium selected the recycling rate and the energy and environmental categories of the buildings as sustainability indicators. The average recycling rate for building projects was 72.3%. By comparison, 87% of car parts and materials in the EU were reused and recycled in 2018.

89% of the projects did not have an environmental rating. The LEED certification was the most popular at 5%. BREEAM, the Finnish Swan Label, and RTS were equally popular with rates of 2%. Had the metric taken into account the floor area of ​​the projects, the relative coverage of these certifications would probably have been higher.

The most popular energy ratings of the buildings examined were B (36%) and A (15%). 40% of the sites did not have an energy rating at all.

Interesting findings on productivity

The average turnaround time for all projects involved in the measurement was about 66 weeks, regardless of the type of project. 

An interesting finding was that there is a clear relationship between the value of a contract and the turnaround time in residential construction. On the other hand, the same correlation cannot be detected with respect to commercial projects.

The range of values of the commercial construction projects was large. In the future, it will be necessary to study the reasons behind the results and choose the indicators so that the relationships between the variables can become even more apparent.

Building 2030 has decided to do a second round of measurement with data from 2021. It will be fascinating to see whether the consortium’s work has affected the latest results positively, and if so, how much.

An article in Finnish of the study is available at aalto.fi.

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