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Construction is labor-intensive and can’t keep up with other sectors technologically. Cost disease is the kind of problem you want.
by viburnum 5y ago
Construction 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