RURAL ENVIRONMENT. EDUCATION. PERSONALITY. Vol. 16. ISSN 2661-5207 Jelgava, 12-13 May 2023 56 DOI: 10.22616/REEP.2023.16.006 Factors Affecting Labour Productivity in the Construction Sector Krista Karlsone 1 Mg.oec.; Antra Ozola 2 Dr.sc.admin. University of Latvia, Latvia krista.karlsone@lu.lv 1 ; antra.ozola@lu.lv 2 Abstract: Labour is a key factor in increasing productivity, working more efficiently, and using available resources more rationally. The labour is influenced by the level of education, skills, and motivation to work more effectively to achieve the company's goals. This paper is a theoretical study to investigate the factors influencing productivity in the operation and development of a construction company. The aim of the study is to investigate the factors affecting labour productivity in the construction industry by exploring the concept of productivity and classifying the most important labour productivity factors. The authors provide an overview of the most important labour factors that can improve the productivity performance of a construction company. Analysing the concepts and approaches of different authors in classifying labour productivity factors, the authors have concluded that the most important productivity factors affecting the construction industry are labour factors, firm management factors and technological factors. Based on the theoretical study, it can be argued that time, cost, and quality are the key elements of labour productivity planning in construction. The labour productivity factors classified later in this paper can be used to carry out empirical research in construction companies. Keywords: productivity, labour productivity, construction sector, skilled labour Introduction One of Latvia's development visions (priorities) by 2027 is a knowledge-based society, which is realised by fostering productivity based on the commercialisation of knowledge, creating a skilled labour that meets demand. Productivity is boosted by new knowledge and technologies, extensive learning opportunities, investment in human capital to turn knowledge into higher value-added products (National Development Plan…, 2020). Higher value added to products can be achieved by increasing productivity (Saulāja et al., 2016). With increasing globalisation, labour productivity is becoming an increasingly important factor in the rational use of public, municipal and private resources. Labour productivity can be an important source of savings in public, municipal and private resources, leading to better and higher quality services for customers. Construction in Latvia is a labour-intensive sector and depends on the skills of its workforce. This is also explained by the fact that labour costs account for 30-50% of total direct construction costs (Gupta et al., 2014). For industry and business to thrive, the potential of the labour force must be fully exploited, and the rational use of other productive resources must be promoted, since the skills of the labour force depend to a large extent on the use of other productive resources (Purmalis, 2011). The impact of productivity on industry and company performance has been studied by both Latvian and foreign researchers, and the labour has been cited as a key factor in increasing productivity (Znotiņa, et al., 2011; Marshall, 2012). The aim of this article is to investigate the factors affecting labour productivity in the construction industry. The following tasks are advanced to achieve the set aim: 1. to analyse the concepts of productivity and labour productivity; 2. to identify the factors affecting labour productivity in the construction industry.