International Door & Operator Industry

NOV-DEC 2017

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

Issue link: http://idoi.epubxp.com/i/901171

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MANAGEMENT Continued on page 44 by John Zoller & David Bowen, Zoller Consulting, Inc. V O L U M E 5 0 I S S U E 6 D E C E M B E R 2 0 1 7 43 Productivity is measured as the quantity of goods and services created (all types of output) by the number of labor hours used to produce that output. Just being busy does not generate real economic growth or strength. Most garage door dealers will probably agree that business has been good for quite some time. Business being "good" for most people translates into "being busy", "making money" and having some certainty of backlog and continuity. Indeed, since the worst American recession since the Great Depression (2007-09), the economy has grown 2.2 percent annually for eight years, which is one of the longest expansion cycles in the post–World War II era. Unfortunately, the "being busy" modest expansion tends to obscure the fact that economic growth is only about one-half of what was required to maintain the pre-recession long-term average. An extensive analysis by The U.S. Bureau of Labor Statistics indicates that it would have taken a 5.5 percent growth rate since 2009 to lift output during the current business cycle up to the long-term average (3.7 percent). 1 The problem is that productivity is exceptionally weak. Productivity is measured as the quantity goods and services created (all types of output) by the number of labor hours used to produce that output. Just being busy does not generate real economic growth or strength. Although constant advances in software, equipment design and management practices have evolved with the intention making corporate America more efficient, actual economic output is stagnant. From 2011 through 2016, productivity reflects only 0.4 percent annual growth in output per hour of work. That's the lowest for a six-year span since the 1976-to-1982 period, and far below the 2.3 percent average since the 1950s. 2 Construction Productivity is Weakest of All The weakest productivity performance in the U.S. economy belongs to the sector in which garage door production and installation reside: The construction industry. The McKinsey Global Institute reports that overall productivity has grown at an average annual rate of 1.76% since 1995, but the construction industry, by contrast, has seen its productivity decline at a 1.04% annual rate. 3 1 U.S. Bureau of Labor Statistics, Beyond the Numbers, January 2017 2 U.S. Bureau of Labor Statistics 3 McKinsey Global Institute, Reinventing Construction through a Productivity Revolution, February 2017

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