A study on the application of economies of scale in the construction industry: the Sri Lankan perspective

Abstract

The application of economic concepts acts as a catalyst to enhance the productivity and quality in the industries such as automotive, transportation and tourism. Economies of Scale (EOS) is such a concept, which could be applied to address the above concern. This research therefore explored the application of EOS to the construction industry. The study adopted a qualitative approach by conducting structured interviews among 14 participants representing consultants and contractors in the construction industry. Subsequently, a content analysis was performed to analyse the data collected, with the aid of NVivo 11. Considering the views of experts, the application of EOS concept is limited to pre-cast elements in both building and civil engineering projects in the construction industry. Majority of the experts opined that application of EOS concept is limited in the construction industry mainly due to unawareness on applicability of EOS (71%) and unique nature of the construction industry (43%). Further, it was identified that uncertainties in the construction industry act as the major barrier to the application of EOS. Confirmation of drawings at the initial stage, conducting training sessions and researches are strategies to promote the use of EOS in the construction industry, which in turn would enable direct economic growth via price efficiencies.