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Note that this is using a counterintuitive definition for "productivity". Most comments here are taking it to mean that construction projects get less stuff do
by ajross 4y ago
Note that this is using a counterintuitive definition for "productivity". Most comments here are taking it to mean that construction projects get less stuff done (foundations dug, concrete poured, etc...), but it's actually measuring it as an economic value in units of "value added per full time worker".
That seems to be rather more related to the distribution of capital than work output. If the construction industry were getting more efficient, you'd actually expect its margins to be declining, right? I don't think this is measuring what people want it to measure.
- VLM 4y agoA plumber can charge $15K to install a new sewer line, both in 2022 and in 1972 (inflation adjusted). However, an increasing fraction of money is likely being spent on lower margin lower productivity "construction". I'm sure faux paint finishes look nice, and they are expensive, but they're not "replace a sewer lateral" expensive. Thus its inevitable the overall market segment will become less productive if it expands. The "mistake" in the linked article is assuming all construction work is equal and unchanging over those decades where CLEARLY there have been infinite real estate fads over the decades. There's just no way replacing countertops with granite can generate as much financial productivity as sewer work, and the fraction of the market spend on low-profit countertops is vastly higher now.