Commercial Construction Index Predicts Rise of Prefabrication
Prefabrication and modular building are likely to increase in commercial construction, according to the Commercial Construction Index, produced by the USG Corporation + U.S. Chamber of Commerce. The CCI captures different measures of confidence in the commercial construction industry by surveying contractors. Produced quarterly, the Q1 2020 CCI asked contractors about the future of offsite construction, as well as its potential to disrupt the industry. Here are some major takeaways from the report:
Contractors predict a new type of supplier
CCI’s survey of contractors focused this quarter on the disruptive potential of prefab and modular construction. Researchers found that 38 percent of surveyed contractors believe that these building methods will be used by new suppliers from outside the industry. And 30 percent predicted that increased modularization will lead to new, vertically integrated companies offering turnkey building, disrupting traditional, multi-trade building methods.
Surveyed contractors say prefab and modular construction will increase
Expanding its view of these new types of building methods, the report also included data collected by Dodge Data & Analytics, published in its Prefabrication and Modular Building 2020 SmartMarket Report. Dodge’s study surveyed contractors already using prefab and modular building methods and asked about their experience. A majority of contractors, 66 percent, said that construction will see a rise in prefabricated single trade assemblies, defined as building components carried out by a single contractor.
Report authors point to the skilled labor shortage as a likely motivator. “As labor markets continue to tighten, offsite construction can provide relief from the pressure of finding workers, since productivity in a factory setting is typically higher than in the field,” say researchers.
Trade contractors find benefits in prefabrication
SmartMarket Report Researchers also found that trade contractors benefited significantly from prefabrication, both in terms of scheduling and budget. Seventy-three percent of respondents said that project schedules decreased with this type of building method, and 82 percent said that project budget improved.
“Trade contractors are most frequently producing prefabricated building elements, and the bids they submit to general contractors may already reflect the schedule and budget decreases they are able to achieve,” say researchers. Trade contractors found comparatively less benefit from modular building, probably since they are not contracted when this method is used, according to Dodge researchers.
Health care will continue to be the largest market for offsite construction
A majority of contractors surveyed in the SmartMarket Report said they would be using modular building and prefabrication in the health care market segment within the next three years. Fifty-one percent of contractors said they have already used prefabrication construction methods in the past three years in this segment and 40 percent said that they have used modular building for the same segment.
Fifty-seven percent expect to use prefabrication for health care projects in the next three years, with 48 percent saying the same regarding modular building.
