This is a post-peer-review, pre-copyedit version of an article published in Journal of the Operational Research Society. The definitive publisher-authenticated version (Choi, K., Haque, M., Lee, H.W., Cho, Y.K., & Kwak, Y.H. (2013). Macroeconomic labour productivity and its impact on firm's profitability. Journal of the Operational Research Society, 64(8), 1258-1268. doi:10.1057/jors.2012.157) is available online at: http://www.palgrave-journals.com/jors/index.html.
The construction industry is one of the largest sectors in the U.S. economy, yet little is known about the
key macroeconomic parameters that affect its industry’s structure and performance. The main objectives
of this research are 1) to analyze the macroeconomic performance of construction industry as a whole and
at fourteen of its sub-sectors in terms of labor productivity, gross margin, and worker’s wages; and 2) to
develop a quantitative model that predicts a firm’s profitability by analyzing various levels of labor
productivity. The results of a non-linear regression analysis based on the comprehensive U.S. Economic
Census data show that the construction industry’s sub-sectors with the highest productivity are the most
profitable with regard to the gross margins that they are able to generate. This study and its model will
help decision makers better assess macroeconomic performance and conduct trend analysis of the
construction industry to serve as a basis for developing strategic roadmap for the future.
Choi, K., Haque, M., Lee, H. W., Cho, Y. K., & Kwak, Y. H. (2013). Macroeconomic labour productivity and its impact on firm's profitability. Journal of the Operational Research Society, 64(8), 1258-1268. doi:10.1057/jors.2012.157