In this paper, productivity and the effective factors are determined in the Iranian construction industry over the period 2006-2012 by the DEA-based Malmquist indices. ‎Moreover‎, ‎the explanatory factors affecting productivity levels are determined using truncated regression method. The results show that the average of productivity levels has significantly decreased. Although sanction has had significant negative correlations with technology change and productivity change, it did not have an effect on efficiency change. Furthermore, it was observed that the economic recession only had a negative correlation with technology change. It was witnessed that construction companies suffer numerous issues in productivity and lesser flexibility in the execution of projects as they grow in size. It also was concluded that companies located in the capital have more potential to improve their productivity due to easier access to technological advancement.