Nowadays, the growth of construction industry’s productivity is slow, unlike the manufacturing sector, where standardization of components, mechanisation and innovation greatly enhance the rate of production, that is because of the procedure of construction industry is more complicate and always take longer time than manufacturing sector. Therefore, the supply to meet the needs and demand of housing and infrastructure is a very slow process.
This is a serious problem which indicates that over the past 40 years, construction projects have required significantly more field work hours over cost of contract. In other words, the construction industry seriously lags other industries in developing and applying labour saving ideas and in finding ways to substitute equipment for labour. While there are a number of construction tasks that have been made more productive through the use of labour saving equipment, it is clear that, looking at the whole industry, there is a significant productivity problem.
Productivity in the construction industry reached a peak in 1968 and, except for a brief and small upturn between 1974 and 1976, has been falling ever since. This paper examines the sources of this slow productivity by estimating a production function to assign weights to various factors responsible for productivity change and deriving a new price deflator for construction which does not rely on labour or material cost indexes, thus eliminating a systematic bias toward overstating the rate of growth of prices
There are few reasons, why the supply is slow in construction sector which because of the rising cost, human affect the construction sector, income tax, lack of labour and the housing supply. And therefore I will discuss about the problem of slow supply that exist in construction sector.
The Rising cost
Basically, cost that have been rising are the rising costs of steel, cement and other building materials are expected to cause a juggling of... [continues]
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