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More Productivity Needed in Construction

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More Productivity Needed in Construction

Construction.

Photo: Geir Ólafsson.

A new study shows that in order to construct each square meter of residential housing in Iceland, 35-60 percent more man-hours are needed than in Norway, mbl.is reports. The job takes 23 man-hours in Norway, while it takes 31-37 in Iceland.

The authors of the study, Ævar Rafn Hafþórsson and Þórólfur Matthíasson, introduced their findings at a recent conference on social studies at the University of Iceland.

Ævar, who has worked in construction for 20 years, found the results surprising. The main reason for the large difference in productivity, he claimed, is organization in the work place and a high employee turnover due to large economic fluctuations.

Ævar stated that much can be gained by increasing productivity. Projects could then be completed faster at a lower cost. It could, furthermore, reduce the country’s residential housing shortage. Besides, increased productivity could enable companies to pay workers higher wages, and, finally, it could have a positive impact on short-term interest rates, since it’s not creating expansion but making the economy more productive.

When asked to explain what parts of workplace organization impacts productivity, Ævar mentioned that Norwegian companies in general own more equity than Icelandic ones and their cost of financing is lower. Therefore, they complete the construction of apartment buildings before allowing any residents to move in. In Iceland, by contrast, it is the custom to allow residents to move into a few apartments in the building before others have been completed. This, according to Ævar, slows down the building process.

A high employee turnover, due to fluctuations in the economy, causes workers to leave their job, even for other countries. The longer people work together in the field, the higher the productivity. In Iceland, Ævar pointed out, less experienced workers are laid off in an economic downturn, forcing companies to start anew with inexperienced workers during an economic boom.

Further research is definitely needed in this area, Ævar concluded.

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