Uneconomic

Uneconomic describes something that is not profitable, efficient, or cost-effective, leading to a financial loss or an inefficient allocation of resources. It implies that the costs associated with a venture or activity outweigh the benefits or returns generated. This can be due to various factors, including high production costs, low market demand, inefficient operations, or an inability to compete effectively with alternatives. uneconomic ventures often drain resources and may require subsidies or external support to continue operating, ultimately hindering economic growth and prosperity. It emphasizes the need for careful assessment and strategic decision-making to ensure sustainable and viable economic activities.

Uneconomic meaning with examples

• The old factory, with its outdated machinery and inefficient layout, was deemed uneconomic to continue operating. Upgrading the equipment would have required an enormous investment with little likelihood of sufficient returns, so the decision was made to close it down. This closure was difficult, but necessary for the company's overall financial health, and would reduce environmental impacts.
• Building a new railway line through mountainous terrain, with projected passenger numbers far below the costs of construction and maintenance, was considered uneconomic. Government subsidies could be utilized to ensure operations, but ultimately this would be a burden. Experts concluded that the project would drain resources and not provide a return on investment, making alternative modes of transport more viable.
• Producing a specialty product with extremely limited market demand, combined with high-cost, artisanal production methods, was considered uneconomic. Despite its uniqueness, the lack of mass-market appeal and the expensive hand-crafting meant that it could not be sold at a profitable price. The resulting losses quickly led to the termination of production.
• Operating a coal-fired power plant without advanced pollution-control technologies and the need for heavy maintenance was found to be increasingly uneconomic. The costs of complying with new environmental regulations combined with fluctuating fuel prices and the potential for technological improvements made this a costly investment with no return. The decision to change to renewable energies was, therefore, inevitable.