- Construction productivity lags behind manufacturing, and costs rarely fall below inflation.
- Economies of scale in homebuilding are modest due to a low ratio of output cost to material input cost.
- Large homebuilders show little cost advantage over smaller ones; gross margins are similar regardless of scale.
- Manufactured homes also exhibit limited economies of scale despite factory production and national codes.
- Transportation costs and low dollar density limit the benefits of larger factories for manufactured homes.
- The low 'idiot index' (ratio of output to input costs) leaves little room for scale-driven efficiency gains.
- Strategies for improvement include focusing on high-ratio sectors, vertical integration, or reducing material costs.