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Efficiency eludes the construction industry (2017)
- foolinaround 5y agohttps://archive.vn/a7cP8 https://archive.vn/a7cP8
- irrational 5y ago> Prices for building materials are not to blame. They are subtracted from measures of value-added (and have not risen in any case). I was shocked to read this until I saw the date. 2017 should be added to the title.
- Zenst 5y agoI would imagine health and safety and deaths have also decreased since that period. Quick look at https://sbcmag.info/news/2015/jan/construction-jobsite-fatality-rate-decreasing https://sbcmag.info/news/2015/jan/construction-jobsite-fatal... does seem to bear this out, though really need a longer time-scale for a bigger picture upon this.
- deelowe 5y agoMaybe this depends on the region? Literally zero concern for safety where I live. Framers especially get hurt all the time.
- wussboy 5y agoPerhaps. Although I do think it’s interesting that we’re now saying things like “framers get hurt all the time” and not things like “framers get killed all the time”, which would have been much more common in ages past.
- deelowe 5y agoI think that’s maybe more due to the medical system though. Here, no one ties off and no scaffolding is used. I know someone personally who almost died not long ago. My father used to do commercial roofing and fell 30ft once as well.
- steveBK123 5y agoExactly. Look at the number of deaths on large NYC building/bridge projects in modern times vs 50, 100, etc years ago. I have an uncle who has lived for 40 years with mental disabilities and unable to drive, from an a construction site accident. My grandfather died before reaching 60 after a series of ailments starting with a back injury suffered in the construction industry. It is hard & dangerous work, which has gotten dramatically safer over time. It nonetheless remains hard on the body.
- the_lonely_road 5y agoTitle should be changed to the actual title of the article instead of the inflammatory subtitle chosen. The article opens up with an example of Germany facing the same issue. Actual article title: Efficiency eludes the construction industry
- dmix 5y ago+ (2017)
- dzdt 5y ago@dang
- smichel17 5y agoThis does nothing. Send an email if you want to get his attention.
- yashap 5y agoThe article does state that it’s especially bad in America, far worse than in Germany: > Construction holds the dubious honour of having the lowest productivity gains of any industry, according to McKinsey, a consultancy. In the past 20 years the global average for the value-added per hour has inched up by 1% a year, about one-quarter the rate of growth in manufacturing. Trends in rich countries are especially bad. Over the same period Germany and Japan, paragons of industrial efficiency, have seen nearly no growth in construction productivity. In France and Italy productivity has fallen by one-sixth. In America, astonishingly, it has plunged by half since the late 1960s.
- baybal2 5y agoI chose the subtitle, over the title because it is stinging, and is straight to the point.
- wrycoder 5y agoDisagree, it’s a worldwide problem. Part of it is due to increased regulation and extra cost and detailing due to regulations.
- Spooky23 5y agoMakes sense. Commercial construction is dominated by bean counters whose incentives and penalties discourage risk. Public works usually require separate bidding for different aspects of projects, which means you have 2-5 different entities to coordinate around. Some states and entities are experimenting with design/build contracts, but there’s obvious opportunity for corruption there, so who knows how that will fare.
- tppiotrowski 5y agoA real estate agent told me that the big problem is in the 50's and 60's you could do massive developments in the suburbs. Imagine building the same house 500 times. You probably get very skilled and efficient at it. Today most developments are limited to just a few houses and a lot of construction is one off for permits and design so there are no economies of scale. Just anecdotal, but made sense to me why costs are going up and productivity declining.
- mschuster91 5y agoOn the other hand customers don't really like their house looking exactly like the rest of the 'hood. HOAs are bad enough, but even the basic structure of all the houses looking identical? That's an eyesore.
- sgerenser 5y agoI live in a neighborhood where there are about 5 different models of (fairly similar) house copied about 50 times each. I’m pretty sure this is still quite common.
- 0xB31B1B 5y agoNewsflash: it’s the building trades unions. We have the tech to build nice buildings much more efficiently but we don’t use it due to political advocacy from the trades unions. We have extremely inefficient regulations around building codes, largely due to lobbying from the trades unions. In CA right now, the trades are lobbying for regulations to ban cross laminated timber structures, which are a step function cost reduction change for 5-12 story buildings. The reason modular construction hasn’t taken off is largely due to political lobbying from the trades unions. They even lobby against zoning code changes that would allow people to build larger buildings with the same tech we currently have. It’s absolutely insane.
- m00x 5y agoDo you have data to cover this statement, or is it simply conjecture?
- 0xB31B1B 5y agoI don’t have an academic study, put I do policy advocacy in this space as a hobby, specifically around supportive housing for the homeless and this is my experience in California and the general understanding of the state of things by the politicians and professionals in the space.
- edoceo 5y agoThat's a lot of words for "it's conjecture"
- 0xB31B1B 5y agoIt’s not conjecture that the trades lobby against well understood policy changes (modlular housing, cross laminated timber construction) that increase productivity, it’s just not something written about in newspapers or academic studies because it is extremely niche and there is basically no audience for the content. There’s maybe 250 people in the state of California that understand the state of things here; they’re lobbyists for developers, lobbyists for trades unions, lobbyists for affordable housing non profits, and a few legislative aides for people on the relevant committees. They mostly know each other and don’t need a newspaper to report on the goings on.
- shiftpgdn 5y ago30 years of state run schools and colleges telling everyone you absolutely need a college degree and everyone who works in the trades is a loser has resulted in a massive skilled tradesman deficit.
- tpmx 5y agoI think this is very common in many "western world" countries, not just the US. And at the moment the software field seems a lot more financially rewarding to smart, practical young people trying to figure out what field they should go into.
- baybal2 5y ago> I think this is very common in many "western world" countries, not just the US. I'd say it's the same process even in China these days. There was a big stir online few years ago where it came to light that Shenzhen polytech grads have significantly larger salaries, and employment than much more prestigious university graduates. On other side, I see more, and more Chinese companies becoming carbon copies of American corporates with engineering offices stuffed full of MBA's, and needing 10 SWOT analyses to fix a single line of code bug.
- voidfunc 5y agoYou are not wrong about the messaging but lets not pretend trade work is green fields and roses, a lot of it absolutely fucks up peoples bodies.
- andrewmcwatters 5y agoBeing poor absolutely fucks up being able to live, so I'd rather have a meaningful career if I had the choice versus being look at unfavorably compared to an automaton in other fields.
- chitowneats 5y agoI hadn't considered this before reading your comments, but it makes sense that skilled trades will be somewhat automation proof, at least in the medium term.
- viburnum 5y agoConstruction is labor-intensive and can’t keep up with other sectors technologically. Cost disease is the kind of problem you want.
- beckingz 5y agoThe article says that companies are avoiding capital-intensive building techniques to avoid getting burned in a recession. Labor costs are faster to reduce.
- tonyedgecombe 5y agoInterestingly we are shifting toward pre-fabricated houses in the the UK: https://www.theguardian.com/business/2017/dec/31/uk-housebuilders-factories-prefabricating-homes https://www.theguardian.com/business/2017/dec/31/uk-housebui... This is largely because of staff shortages.
- beerandt 5y agoAnd since Dodd Frank, financing is much harder to come by. Most residential contractors who used to be able to build the same spec houses a few dozen times each, are now in a position where they largely survive off of client financing, which means even spec house plans become client dictated custom homes. It's much easier to build a dozen of something when you don't have to deal with 12 different clients/owners.
- viburnum 5y agoThis is a good example of how fiscal and monetary policy that allow slumps to persist have impeded investments in new technology.
- joe_the_user 5y agoUnlike health care, where our understanding of human biology is fundamentally limited, I can't see a fundamental limit to automation in construction. The article notes that construction has become less capital intensive over the years due the uncertainty of construction demand (kind of like expensive defense items like planes being built almost by hand because orders are whittled down to a few per year). And sure, the "cost disease" effect makes labor intensive industries seem less productive with apparently too-high-paid people. https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease
- Closi 5y agoThe article makes a few assumptions I disagree with - one of which is that the projects they list being over-time and over-budget are because of builder productivity rather than the primary contractors over-promising to win a large contract. In addition, value added per hour can be a sign of productivity loss, but is also impacted by shrinking margins (which they note is the case - but shrinking margins has nothing to do with productivity and everything to do with competition). Also the article says "Many building professionals use hand-drawn plans riddled with errors" - Hand-drawn plans? This isn't my experience in the UK (I design warehouses and have worked with lots of primary contractors). CAD here is pervasive, and anyone with a hand drawn plan would be laughed out of the room (unless you were literally a builder doing a quick sketch - in which case CAD isn't a replacement). And the article then recommends... self driving bulldozers as one part of the solution? This is so far away from being safe on a worksite that it's nowhere near an immediate concern.
- PragmaticPulp 5y ago> The article makes a few assumptions I disagree with - one of which is that the projects they list being over-time and over-budget are because of builder productivity rather than the primary contractors over-promising to win a large contract. I’m guessing this explains most of it. It’s common in the construction industry to compete during the bidding phase by underestimating the time and cost of the project, then making up for it with change orders later. It’s so pervasive in some domains that contractors feel they have no choice but to play the game to get contracts. The smart buyers employ people who know how to manage contractors and construction companies with contracts that make time and budget overages less profitable for the company. The catch is that you need someone on your side watching the work so they don’t try to cut corners to get the job done. It’s difficult. At smaller scales, it’s common for contractors to bid more projects than they can handle and then rotate between them, tending to the clients who complain the most. They’d rather overbook their calendar than have gaps in between projects. Construction and contracting are not fun industries to deal with. Having known reputable contractors is very valuable, but the good ones are often booked out a year in advance. And I agree about the other oddities in this article. I don’t even know if hand drawn building plans would be allowed in modern towns. Usually a licensed engineer is required to draw and approve the plans and there aren’t many licensed engineers still doing this who don’t use CAD.
- tibbydudeza 5y agoMy friend is a plumber - it is hard work, smelly and dirty but does he charge $$$.
- EarthIsHome 5y agoAnecdotal, but when our local government does a project, they only look at the price tag. If they can afford it, it gets approved. Building something is very labor intensive (the way we do it here in the US; the article talks about China and other ways of building) and the actual proposed budgets should be higher and timelines longer based on how we build. But in order to win a contract, the builder must lie and say "we can do it for this much and in this time frame," which tends to be lower than what we can actually realize.
- rubyn00bie 5y agoOh, I think I can explain this pretty easily... most construction companies aren't competitive. Construction and real-estate are two markets that are from top-to-bottom, inside-out, soaked in cronyism. I'd wager most multi-million dollar plus construction companies simply know the right people to get the contracts and as a result never effectively "bid" on a single fucking thing. Why then, if there is no real competition, would you ever increase productivity? Short answer, you wouldn't. Being more productive would require increasing the rate at which you use capital (i.e. you spend more) witout any accompanying increase in gross profits. shrug
- hellbannedguy 5y agoIn most parts of the USA winning on a public project requires three bids. Why do the same companies always seem to win? In my neck of the woods (The Bay Area), one company seems to get all the jobs. The company's name rhymes with Gelato. I started to look carefully at the bids. (I got a General Contractor's license a while ago, and it an easy test, and verification of work experience is a joke.) Ok, I looked into the owner of the contractor's license, and in all three bids, they had a "Gelato" as owner of the company. It looks like the "Gelato" family sent three kids to Sacramento to take the test, and get their licenses. They all bid on the same project, and one wins. They must share the million dollar equipment, and pool of employees though? Is it legal? I don't know. Do I know for a fact this is how it works--no. (There's a bill, I believe up for vote soon, in Sacramento. It requires all bidding parties to verify their company us big enough to do the project. I don't think we need a bill like this. I don't think small companies bidding on huge project to is a problem. If I am right about "Gelato" construction company--authorities should look into the bidding process. There us a reason, besides inflation, that public projects get more expensive each year, and never seem to end.)
- systemvoltage 5y agoCurious - what is the name of the company? Why not disclose "Gelato"?
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- jseliger 5y agoRelated: https://constructionphysics.substack.com/p/why-its-hard-to-innovate-in-construction https://constructionphysics.substack.com/p/why-its-hard-to-i...
- nroets 5y agoI think building has become a lot more complicated: 4 decades ago, semi face brick buildings with carpets and simple trimmings was common. Now it's plastered walls, with large doubled glazed windows everywhere. Laminate floors. HVAC. Extra insulation to reduce heating costs. And all buildings now need to be wheelchair accessible with lots of ramps, lifts and specialised bathrooms. Result: Specialised workers at very stage, reducing competition and causing delays.
- ayon1922 5y agogreat
- deleted 5y ago[deleted]
- sircastor 5y agoI once rented a room from a guy whose job was to lead a “follow” crew behind crews that were building houses. I job was to fix mistakes that the building crew had made during the initial build. I’m glad he had a job, but it stems like the builder could have saved a lot of money by just moving a little slower, and doing it right the first time. Then again, maybe the cheaper labor building the houses offset the extra cost.
- coryrc 5y agoProblem I get into: spending so much time thinking about the right/most efficient/best way to do something that I don't get anything done. I'd be more productive of I could just work at one thing continuously and let someone be an expert at fixing the trickiest cases. Also, houses settle. Cracks can show up after you are done regardless.
- Gibbon1 5y agoYou can think of that guy as a fixer. His job is actually three jobs. Fixing issues. Quality control. Monitoring the building crews performance.
- worik 5y agoDown the Wikipedia rabbit hole and I see that Brandenburg Airport was finished in 2020. In its preamble the Economist says: the project encountered a series of successive delays due to poor construction planning, execution, management, and corruption That would be poor: planning, execution, and management. The corruption was of the best European standard. Quite excellent.
- foolinaround 5y agothe blame pointed on having multiple/layers of sub-contractors can be avoided by the client inserting this clause in their contracts, or am I vastly simplifying this? In IT, it happens often that there is a clause that prevents contractors from sub-contracting a position. This forces them to hire for that skill. What is special about the construction industry that this cant be done?
- sgerenser 5y agoIf you had a construction RFP that banned subcontractors I don’t think you’d ever get any bids.
- morpheos137 5y agoProbably a very large part of it has to do with workforce cultural issues.
- straw_hat 5y agoCan you elaborate? What's your experience working in the construction industry, and what did you learn about that industry's workforce culture?
- anonu 5y agoWe haven't seen big ideas in the construction industry yet. Where are the 3D printing processes and modular designs? Sure, they exist, but not on the scale needed to revolutionize this industry.