Why Homebuilding Lacks the Economies of Scale Seen in Manufacturing
By
Brian Potter
Pure flour-power. Hearty enough to carry you through lunch.
Summary
This article examines the construction industry's persistent productivity problem, specifically focusing on homebuilding. It analyzes why construction productivity lags far behind manufacturing and other industries, exploring metrics from the US and globally. The key finding is that construction costs consistently rise at or above inflation rates, and productivity improvements are minimal or nonexistent. The article questions why economies of scale—which drove efficiency in manufacturing—have failed to materialize in homebuilding, examining structural factors unique to the construction industry.
Key quotes
· 3 pulledConstruction productivity almost always rises much less in construction than it does in industries like manufacturing; often, it doesn't improve at all.
Construction almost never gets any cheaper: construction costs almost always rise at or above the level of overall inflation.
Over the last few months we've examined the extent of the construction industry's productivity problem.
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