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The number of persons employed directly in
the construction industry is around 135,000. The material-, service- and
supply industry employ approximately an additional 55,000 persons. The
number of companies directly or partly involved in construction is
approximately 24,000. The industrial structure is dominated by a large
number of smaller and traditionally craft-based companies. Labour-only
subcontracting is rarely used in Denmark. The breakdown of employment in the
industry by trade is given in figure 2
The number of companies working directly in the
building industry as architects and engineers is approximately 2,500. Also this
design and planning field is quite specialised by trade. Especially some
consultant engineers companies have grown quite large with more than 1,000
employees and are working world wide.
Figure 2 Employees by Trade (including civil engineering)
Source: Statistics Denmark
Principal
activities
At the present time the main activities of the sector are divided into two
main segments - renovation and new building activities which each cover roughly
half of the domestic activities in the industry. The absolute and relative
importance of renovation activities has been gradually increasing during the
last decade primarily due to the ageing of two large building stocks from
respectively the beginning of the century and from the 1960s. In 1990 the
turnover of the industry as a whole (including civil works) was approximately
DKK 160b.
From an export point of view the material and component producers have been
very successful in recent years. Though the companies in this field are
relatively small on a European scale exports from the sector have achieved a
national economic importance comparable to that of Danish agriculture. The
aggregate level for the industry's exports was in 1994 amounting to over DKK 29b
with the export of building materials responsible for more than 60 %. During the
1990s the level of the export has stabilised at a very high level between DKK 25
and 30b per annum, as is shown in table 1.
The export trade is concentrated in building materials characterised by a high
level of quality, design and durability and therefore at the price-heavy end of
the market. Danish firms have been particular successful in wooden products and
interior fittings.
The export trade is concentrated in building materials characterised by a
high level of quality, design and durability and therefore at the price-heavy
end of the market. Danish firms have been particular successful in wooden
products and interior fittings.
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Table 1 Danish
Construction Exports
Figures are in DKK m.Source: Danish Ministry of Housing and Building |
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1992
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1993
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1994
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| Producers of materials and components |
13,226 |
12,390 |
13,359 |
| General contractors |
3,852 |
4,256 |
4,178 |
| Specialist contractors |
1,554
|
1,337 |
1,413
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| Trading |
5,885 |
4,753 |
4,737 |
| Architects and engineers |
5,443 |
5,328 |
5,407 |
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Total
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29,960
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28,064
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29,094
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Contractors and not least design and consultant companies have also gained
notable shares of export markets, especially in projects concerning energy and
environmental solutions, areas in which Denmark has acted as a vanguard in the
international community. And Danish architects are well-known for winning
international architectural contests on the basis of a high artistic and
professional performance level.
The development of the industry and the
danish industrial house
After the second world war it became clear to Danish planners and politicians
that a strongly rising demand for housing would occur in the 1950s and 1960s due
to an increased rate of birth. At the same time an intensive migration of people
from rural parts to urban parts of Denmark was in progress, making the needs for
efficient production of housing in the cities even more urgent. Further to this
a general rise in the level of economic activity was expected, thus increasing
the demand for production facilities as well as buildings for commercial and
administrative purposes.
The rising need for housing was not only expressed in terms of quantity but also
as a demand for better quality, including for instance improved technical
installations in the dwellings (central heating, bathroom and toilet etc.) as
well as a better physical planning, which would allow tenants easy access to
green areas and public leisure facilities.
The demand for quality and quantity called for a completely new approach in
order to increase the output from the construction industry. A strong shortage
of skilled labour could be anticipated, causing "bottlenecks" and
sharp increases in wages and production costs; to prevent the consequences of
this a more industrialised concept had to be developed and implemented. (Erhvervsfremmestyrelsen
1993) - this was the industrialised house.
The basic idea of this concept was to transfer a major part of the work,
traditionally done on site by craftsmen, into factories as part of an
industrialised production process. This could activate the large reserve of
unskilled labourers and thus increase the output from the construction industry
in accordance to the demands from the surrounding society. An equally important
aspect of this development was furthermore to improve the working conditions of
an industry characterised by heavy loads, severe noise and dust exposure as well
as use of hazardous chemicals.
The take-off of this development was implemented in a rather dramatic manner by
the Boligsministieriet (Danish Ministry of Housing and Building) in 1953. In a
departmental order it was demanded that no more than 15% of the labour time for
the production of a basic building structure should be consumed by skilled
labour, if government finance was to be obtained. How this target was to be
achieved by the actors of the construction process was however not specified -
only the accumulated result of the condition was defined
In reality by setting such financial restrictions the government created a
new building market. Obviously this lead to change in a sector traditionally
dominated by the architect and craftsmen as the key actors of the process. From
that moment contractors gained importance in connection with the widespread
introduction of the precast concrete technology in building. And the contractors
were - not least for historically reasons - in an advantageous position to
exploit this development. (Bonke & Jensen 1983)
In 1960 the next major step forward towards industrialisation
was taken in another legislative action - the so-called Montagecirkulære
(departmental order for the assembly of prefabricated building). In this the
entire building process was described as part of an industrial production system
in order to make further reductions in the consumption of labour and materials.
Unlike previous attempts at industrialisation, planning and design was now
defined to be an integral part of the industrialised construction process.
As part of the industrialisation strategy the
Boligsministieriet had earlier introduced certain practices for the design of
buildings. These practices included the modulus-grid system which made it
possible to standardise dimensions of components for the building, and the
system is thus to be considered an important precondition to the production of
building materials on a large scale industrial basis. Till then each window,
door or cupboard had been produced individually by joiners in workshops or on
site according to specification. The modulus-grid standard sizes made it far
easier to apply industrialised methods and machinery to the production of all
kinds of building components and materials.
One of many spin-off examples is illustrated by the emergence
of modular kitchen industry, which transferred the production of kitchen units
from the building site into the factory. The industry intensified this
development by introducing sheet-based materials like melamine faced chipboard
and high pressure laminates for tabletops. In similar ways having significant
consequences for the traditional manufacturing of interior building parts the
development of the paper faced gypsum panel constituted a new basis for
improving site efficiency.
Equally as important, however, was the focus on the interface
between building components, the intention being to make components multi-usable
by setting up certain standards and guidelines for connecting details and joints
between them. The combined efforts of these provisions made it possible for
designers to make the desired variations when using standard components. This
freedom covers both the technical and design aspects of the building.
Furthermore these measures of co-ordination undoubtedly have contributed to the
foundation of a quite strong building component industry in Denmark, giving many
Danish producers a relative advantage in comparison to their competitors in
other countries. Positive trends in export figures are continuously indicating
the lucrative effects of this technology policy as discussed above.
However the most significant impact of the modulus-grid was
on the production of precast concrete panels. From the 1960s this building
system formed the core of the Danish construction industry. As indicated the
development also placed the structural contractor in a key position, in many
cases taking over responsibility for planning, design and construction. Several
of the major general construction companies developed their own industrialised
housing concept thus setting their fingerprints on the growth areas of Danish
cities. The systems were built either on an open or closed concept reflecting
the adaptability to complementary products from third-party producers.
Historically these larger construction companies were
accustomed to working with concrete from experience in civil engineering. They
employed a large proportion of un-skilled labourers as part of their staff and
had access to the necessary equipment for the assembly of the larger concrete
panels. Furthermore the larger contracting companies had a background in a
bigger production volume and hence it was obvious for the companies also to
diversify into production of precast concrete panels.
Productivity
The consequences of this comprehensive technology policy of the Danish state
were manifold. Concerning work productivity, not least, the effects were quite
impressive. The amount of spent manpower producing one "standard"
dwelling unit reduced sharply - from 1950 to 1980 by approximately 50 %. This
development in fact enabled the building industry to supply the quantity of
housing required and demanded by the surrounding society in the period.
Figure 3 - Productivity Improvement in Housing Production
Source: Bonke & Jensen 1983
The time spent on site reduced by approximately 65% while white collar office
work more than doubled. The increased prefabrication also led to an absolute
increase in time consumption in factories. However this increase was relatively
minor mainly due to the fact that standard sizes for building components had
been introduced, thus promoting investments in high automation technology. Also
contributing to the increase in productivity was the appearance of lighter,
advanced (hand)tools appropriate for the assembly and fitting of prefabricated
materials on site. These tools became electrically or pneumatically powered
making site work processes much faster and easier. The development in labour
productivity (time consumption for production of one standard flat of 80 m²)
from 1950 to 1980 is illustrated in figure 3.
However appealing this development might seem it hides the fact that
productivity has fallen since the change of concept from high-rise blocks of
flats to high density low-rise housing in the 1970s. Recent surveys indicate
that this development has meant a direct increase in the resource requirements
measured in the period from the 1960s to the 1980s
This development can be explained in several ways. One obvious explanation is
the evident change in the product and the increased variation. Each project must
be dealt with individually as opposed to being non-produced. The projects have
also changed in the sense that they normally comprise 20 - 50 dwellings compared
to the 500 - 1000 units often found in the projects during the 1960s. The
immediate effect of this change is that the repetitive effect is reduced and at
the same time the amount of planning spent on each unit in the project is
relatively smaller compared to the larger projects. It is often the case on the
smaller projects that planning is very scarce or completely absent. The
contractors estimate that the relatively high, initial cost of planning cannot
be recovered from a more efficient and smoother production.
Furthermore it appears to be of great importance that the Danish
prefabrication concept, especially concerning the basic structure of the
building, did not undergo radical adaptation in relation to the changes in
architectural and functional design (low-density housing). Thus the
prefabricated concrete panel continued to play a totally dominant role - and it
still does. This obvious irreversibility of technology is furthermore confirmed
by the surprising stability in the division of labour and functional relations
between actors in the building process, despite any qualitative and quantitative
market shifts in the thirty years.
During this period the stationary industry has been able to increase both
productivity and variation in the product at the same time leaving the Danish
construction industry in a weakened competitive position. In comparison, the
building industry is characterised by a fragmented organisation custom built for
each project. This means that communication and interaction between the parties
is limited by the short history of collaboration and the random knowledge of the
competence and capability among the partners in the project organisation. At the
same time the quality of the product has been very heavily disputed due to the
increased occurrence of building defects. The economic consequences of these
problems are tremendous and if incorporated in an analysis of productivity, the
increase in spending of resources would obviously tip the balance even further.
One of the more recent strategies to solve these problems and to regain some
of the lost productivity has been to attempt a vertical integration of
production by promoting the formation of consortia or fixed constellations
between all the important parties (the design team, contractors and selected
suppliers of materials) in the project organisation. It is the ambition that
this new way of organising construction projects will not only mean reduction in
the consumption of resources but it should also result in new products suited to
modern concepts in terms of ecology, energy consumption, flexibility et cetera.
This development is further discussed in the section entitled "Organisational
developments".
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Principal activities