Manufacturing Outperforms the Construction Industry’s Productivity Rate

According to the Economist the construction industry has been plagued by weak production growth since the financial crisis.

Unlike the manufacturing industry which invests heavily in new technologies, the construction industry relies heavily on increased employees on the payroll.

Since 1995 the global average value added per hour has grown at a quarter of the rate of manufacturing. McKinsey claims that no other industry has done worse.

The Economist’s figures suggest that the production rates are worse in rich countries, in the USA the rates plunged by half since the 1960’s. Concerningly, the industry is worth $10trn per year. If the construction industry had of matched that of the manufacturing industry over the past 20 years it would be $1.6trn better off each year.

Modern methods of construction such as modular construction utilises technology to enable faster outputs of production.

“At Elements Europe all of our products are manufactured in a controlled factory environment using many forms of technology. Even our steel rolling machines are connected to our cad designs” Commented Nick Davies, Operations Director at Elements Europe.

Modular manufacturing enables standardisation which allows for a faster throughput that combined with technology results in greater production rates.

“We can deliver accommodation solutions at a far faster rate than traditional construction. We are currently manufacturing 20 room modules per week for one scheme we are completing in Greenwich halving the main contractor’s time on site” Added Davies.

For the construction industry to compete with the manufacturing industry it is clear that greater investment is needed in technology. In order to do so the government must incentivise construction companies to invest. Most clients want lower build costs and faster completion rates, hampering progression within the industry.

“Our clients are mainly contractors or developers who are looking to off-site construction to deliver earlier cost certainty, faster build schedules, higher levels of quality at competitive levels with traditional construction” Commented Simon Underwood, Managing Director at Elements Europe.

“We have invested heavily into our production methodologies and the latest technologies to ensure that we can provide the industry with the solutions they need” Added Underwood.

Elements Europe is a leading modular manufacturer with over a decade of experience in delivering off-site solutions to the construction industry.

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