Prefab Construction Industry Market Summary
Prefabricated construction, defined as construction in which 2/3 or more of the construction process is finished off-site, and finished pieces are then shipped to the site for assembly. Prefabricated construction includes prefabricated systems (wood drying, cutting, and processing would be done off-site), panelized systems (completed panels are constructed off-site), and modular systems (entire modules of a house are completed off-site). Prefabricated construction allows construction projects to be finished in as little as half the time of a regular construction project, and they are constructed according to state-wide building codes.
CURRENT INDUSTRY TRENDS
Currently, there are only a small number of homes in the United States that are prefabricated, with only two percent of new homes constructed in the modular fashion.
The 2014 Survey of Construction shows that in 2014, only 10,334 single-family, panelized/precut homes and 10,560 single family modular homes were started. In 2014, most modular homes built in the United States were "concentrated in the East North central, South, and mid-Atlantic regions of the country."
In 2016, the North American prefabricated construction industry stood at $10.2 billion US dollars, with the United States making up the vast majority (seventy-five percent) of this figure.
The prefabricated housing industry is expected to grow in the United States. By 2020, it is estimated that shipments from the United States will reach 123,500 prefabricated units valued at $7.3 billion dollars. The US demand for manufactured housing, the largest part of the prefabricated housing industry, is projected to reach eighty-five thousand units in 2020. Demand for precut, panelized, and modular housing is expected to rise by 5.6% per year through the forecast period as well.
Modular Building Institute (MDI) has stated that modular building construction comprised three percent of all North American commercial construction in 2017, with that number expected to rise to above five percent in the next five years. This compares favorably to the Permanent Modular Construction (PMC) data from 2011-2014, which shows that only one percent of commercial construction took advantage of modular tactics. The commercial construction market is currently the market that takes advantage of modular housing most frequently, followed by the industrial, healthcare, and education markets.
The prefabricated construction industry has been slow to grow in the United States due in part to a problem of perception. Many people believe that prefabricated housing to be of inferior quality that therefore would not last long. Furthermore, many people are uneasy with the lack of concrete in modular housing, since past construction projects tended to rely on concrete.
However, the future for prefabricated housing in the United States looks bright. Roger Krulak, an executive with Full Stack Modular, believes that "with advanced robotics, automation, and digital building information technologies—and increasing concern nationwide about the affordability of urban housing—factory-built housing once again seems poised for wider adoption."