Currently in Ethiopia the construction industry is growing fast. Nevertheless, it is facing problems like cost overrun, time overrun, quality and productivity in many of the projects. Productivity remains an exciting subject and a leading theme to an efficient use of resources in the construction sector. Labor productivity is principally vital for all but especially for developing countries like Ethiopia; where most of the building activities are performed manually (i.e. labor intensive). The objective of this research is measuring productive time, contributory time, and unproductive time and hourly output of skilled labor in five selected trade of works (floor slab concrete work, 20 cm thick hollow concrete block (HCB) work, stone masonry (sub-structure) work, 2nd coat wall plastering work and floor slab formwork operations) and also exploring and evaluating the factors that negatively affect labor productivity in building construction projects in Bahir Dar. Data were collected from both primary and secondary sources. The primary data were obtained through work sampling technique, questionnaire and interview. The secondary data were obtained from previously done different researches, internet sources, journals, books, reports and various articles. The results and analysis of 49 factors considered in the questionnaire indicated that the main factors negatively affecting labor productivity in Bahir Dar City building construction projects are: material shortage, payment/salary delay, tools and equipment shortage, payment delay from client side, poor wage, construction method, labor absenteeism, lack of clear and daily task assignment, lack of labor close observation and lack of work progress follow up. Among the top ten factors material shortage scored RII value of 91.20% and lack of work progress follow up scored RII value of 81.80% which is the least of the ten; the remaining falling in between the two extremes. All the top ten factors are at high significance level, since all the factors RII values are ≥ 80.00%. The results of skilled labor productivity time observation using activity sampling technique on five work items demonstrated their productive time, semi-productive (contributory) time and unproductive time. Regarding productive time among the five trade of works, stone masonry (sub-structure) trade labors spend 80.74% of their time and floor slab formwork trade labors spend 72.33% of their time in productive works all the rest still falling in between these two. The finding of the study revealed that, the hourly productivity output of the skilled labors to be: in floor slab concrete (2.89 m2), in 20 cm thick hollow concrete block (1.31 m2), stone masonry (0.69 m3), 2nd coat wall plastering (1.49 m2) and floor slab formwork (0.23 m2).