Comparative analysis of the optimum level of manufacturing capacity in advance of the construction sector in years 2001-2018

Document Type : Research Paper


1 Department of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran

2 Department of Economics, Allameh Tabatabai University, Tehran, Iran


The main purpose of this article is a comparative analysis of the optimal level of production capacity of leading industrial industries in the construction sector in the years (2001-2018). In this article, we compare six different industries that are leading industries in manufacturing. These industries are: (Cement, lime and gypsum, wood and wood products, glass and ceramics, construction equipment, home and decorative, stone), in order to determine the optimal level of production capacity in the industries of the leading factories with double-digit ISIC code.Rev.2 and ISIC.Rev.3 Translog cost function was used. Production efficiency is the equivalence of scale traction or cost traction (inverse of scale traction) with one. To obtain the optimal level of production, first from the equation of scale elasticity or cost elasticity with one, a production level was obtained which naturally satisfies the first condition, then the second condition in production was obtained for research purposes. The results of the analysis of the leading production capacity of the construction sector showed; in the cement, gypsum and lime industries, showed that the amount of optimal production capacity in the cement, gypsum and lime industries was estimated at 190\%. The wood and products industries use just over 28\% of their nominal capacity. In the glass and ceramic industries, the capacity utilization was estimated at 154\%. Construction equipment Capacity utilization was estimated at 137\%. Home and decorative industries; Capacity utilization was estimated at 149\%. Stone industry, the nominal production capacity of these industries is about 41\%. Capacity utilization was estimated at 78\% in the analysis.