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While it is not a new phenomenon for contractors to use prefabrication methods to save time and money on some project assemblies, new survey data demonstrates that a growing number of contractors, especially in the mechanical and electrical specialties, report plans to implement modular building techniques or to open their own pre-fab shops in the near future.

According to FMI’s 2013 Prefabrication and Modularization in Construction Survey, a modest 40 percent of all surveyed contractors consider their capabilities in prefabrication and modular construction as a part of their company’s strategic initiative. They report the following as driving forces.
  • The constant pressure to lower price.
  • The need to achieve a competitive edge in markets increasingly calling for the use of prefabrication and modularization (i.e., hospitals, hospitality and education facilities).
  • The lack of, or impending lack of, skilled construction labor.
  • The use of BIM, allowing greater coordination of design with construction.
  • The need to increase productivity,

Making the Switch

Contractors have always been known for their talents in mobilizing labor, equipment and material to get the job done. Now, they must learn how to make a profit from manufacturing facilities. It is not always an easy switch. Owning and operating prefabrication facilities is not for everyone, as risks are involved in entering a new business area of expertise.

Several market forces influence a construction company’s decision to enhance its ability to produce prefabricated and modular assemblies, including: price pressures, difficulty finding skilled trade labor, tight project schedules and more complex building designs.

Mechanical and electrical contractors are already ahead of the game, as these specialties have owned prefabrication shops for a long time. Nevertheless, times are changing. These shops should now be employing the best of new technologies, including BIM and automated equipment. Improving on productivity and workforce training should be high on the list for contractors that are looking to achieve better results. These prefabrication capabilities and capacity should be strategically marketed as competitive advantages.

Selected Survey Statistics

Survey statistics demonstrate that the use of prefabrication and modular building assemblies remains steady since the last FMI survey three years ago, with some interesting shifts taking place in the subcontracting market:
  • • 48 percent of mechanical and electrical contractors had more than 11 percent of their current project work accomplished using prefabricated assemblies. This figure is slightly less than FMI found in its 2010 survey, when the number was 52 percent.
  • More planning for prefabricated assemblies is taking place in the design phase of construction, with 35 percent of all mechanical and electrical contractors doing so in 2013, compared with just 11 percent in the 2010 survey.
  • In 2010, 90 percent of respondents owned their own prefabrication facilities. That figure was 81 percent for mechanical and electrical contractors in 2013. However, in 2013, more contractors are subcontracting out prefabrication, and more of those who own shops are performing subcontracting work for others.
  • In 2013, of those mechanical and electrical contractors that do not own prefabrication facilities, 17 percent are considering it, compared with just 5 percent in 2010. However, only 33 percent have official plans to start up their own prefabrication shops compared to 57 percent in 2010.
  • On average, for mechanical and electrical contractors, 12 percent of total annual labor hours were committed to prefabrication. In five years, these contractors would like that number to rise to 32 percent.
  • On average, 26 percent of mechanical and electrical contractors surveyed have never analyzed the efficiency of their prefabrication efforts, and only 23 percent reported that they performed an analysis for every project.
  • 40 percent of all contractors responding consider their capabilities in prefabrication and modular construction a part of their company’s strategic initiative.

Based on the survey data, it appears the use of prefabrication and modular assemblies will be on the rise in the years ahead, as more contractors express interest in these time and cost-saving project methods. However, contractors have a ways to go in terms of workforce training, technology and strategic business planning before they dive headfirst into this market.

To read FMI’s 2013 Prefabrication and Modularization in Construction Survey in its entirety, visit: http://www.fminet.com/media/pdf/report/PrefabricationSurvey2013.pdf.

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