Comparison of precast construction costs: Case studies in Australia and Malaysia

In their efforts to bring about improvements in build quality and increasing construction productivity, many developing countries have suggested policies to increase mechanisation or prefabrication in their respective industries. This paper presents a strategy to optimise construction output by examining the relevant political, social and economic circumstances, and related constraints for the adoption of precast concrete technology. Case studies of precast concrete building costs in Melbourne, Australia and in Perak, Malaysia clearly illustrate the technological trade-off between capital and labour in the production function. The results indicate that the higher labour costs in Australia leads to a more economical precast solution whereas the low wages of migrant construction labour in Malaysia precludes the use of the more capital intensive precast technology. Current fiscal incentives for the adoption of industrialised building systems in Malaysia are clearly deficient. The impact of labour policy, employment of migrant labour, training, and technology is discussed to identify appropriate policies, reforms and incentives that could increase the adoption of prefabricated components into buildings and perhaps strengthen the construction industry in the long run.