BUILDING RENOVATION – A NEW INDUSTRY ?

misbe2011 Tracking Number 85

Based on construction economics, building economics and assessments of building service life, the renovation need of buildings is notably higher than the actual amount of building renovation. As energy saving renovations become more common, the volume of building renovation is forecast to grow even further. Building renovation suffers from both a lack of suppliers and tailored solutions. This study has searched for a reason for this phenomenon. This is a theoretical study in economics, testing the rationalisation ability of three different economics theories, including the theory of construction economics, evolutionary economic theory and the theory of creating customer value. Each of these theories explains a part of the phenomenon. In accordance with path dependence theory, companies in the construction industry have locked on new construction, and in the sector of new construction, companies have developed from small to large, following the industry evolution theory. International companies have entered the market looking for business where the volumes suit them. New construction has created buildings that cannot necessarily be renovated with local skills. In accordance with construction economics theory, renovation construction competes in all owner sectors with other expenditures, and since renovations can be postponed, they often are. Demand is not activated by interesting supply or by supply corresponding to the needs. Renovation projects are implemented with a production-oriented new construction concept. In addition, a user-oriented approach does not produce a good outcome if it does not include catering for the special features of renovation construction. The competitive factors in renovation construction are specific to such an extent that it is a different industry than new construction.