A red banner that says off-site construction is growing

The Growth and Adoption of Off-Site Construction

A quick look at the development and benefits

Off-site construction is an overarching term for the planning, design, fabrication and assembly of building elements at a location other than their final installed location. This supports the rapid and efficient construction of a permanent structure, according to the Off-Site Construction Council.

To build on that:

Prefabrication is the assembly of building systems and components before integrating them into the structure.

Though similar, the difference between prefabrication and modular construction is that the latter refers to complete rooms or sections of a structure that are built in a factory.

Offsite construction has gained popularity. Why?

Big-name brands have made significant investments in this building method.

For example, Marriott International announced in 2017 that they would use modular construction in 13% of their North American hotel deals that year.

For good reason, the benefits are well-known at this point.

The Modular Building Institute identified nine advantages.

  1. Reduced Construction Schedules: modular building construction can happen simultaneously with site and foundation work, reducing project timelines by 30%-50% relative to traditional construction methods
  2. Elimination of Weather Delays: because 60%-90% of construction is completed indoors with modular construction, weather-related risks are mitigated, leading to a faster return on investment due to buildings being occupied sooner
  3. Unlimited Design Opportunities: modular units can be added to existing structures and matched seamlessly to their aesthetic
  4. Safer Construction: building in a controlled, indoor environment lowers the risk of accidents
  5. Greater Flexibility/Reuse: modular buildings can be disassembled and relocated or refurbished for a new use, reducing raw material use and lowering the energy expended to build a structure for a new need
  6. Less Material Waste: building in a controlled factory eliminates waste by recycling materials, controlling inventory and protecting building materials
  7. Improved Air Quality: modular structures are more often completed in a factory with dry materials, reducing the potential for high levels of moisture to be trapped in the new construction
  8. Better Engineered Building and BIM: permanent modular construction requires advanced BIM for visualization to assess energy performance and identify the most cost-effective efficiency measures
  9. Building to code with quality materials: modular buildings are built to meet or exceed the same building codes and standards as site-built structures and use the same architect-specified materials as in conventionally constructed buildings

A 2020 report from Dodge Data & Analytics outlined the benefits and impact of prefabrication and modular building. It collected data from a collection of architects, engineers, general contractors, construction management, modular builders, and trade contractors — totaling 608 qualified responses.

The benefits largely reflected those listed above — improved productivity, improved quality, increased schedule certainty, improved cost predictability, reduced waste generated by construction, increased client satisfaction and improved safety performance.

Forecasts for the next three years indicated the most likely building types will be prefabrication in modern construction. These are the results from most likely to least:

  • Healthcare facilities
  • Hotels and motels
  • Multifamily
  • College buildings and dormitories
  • Low-rise offices (1-4 stories)
  • K-12 schools
  • Public buildings
  • Commercial warehouses
  • Manufacturing buildings
  • High-rise offices (5+ stories)
  • Retail stores and shopping centers

The adoption of offsite construction has been relatively slow. Why?

The practice is growing, but the adoption rate has been slow and intermittent due to industry perception.

Why? Many cite a simple phrase: we’ve always done it this way. Changing mindsets and operations can be difficult in traditional settings.

Dodge Data & Analytics indicated the top obstacles preventing future use of both prefabrication and modular construction, and sorted the impact on decision-makers from most to least.

Factors preventing prefabrication:

  • The project delivery method prevents effective prefabrication planning
  • Prefabrication is not part of the project design
  • Our project types are not applicable for prefabrication
  • The availability of a prefabrication shop locally
  • The availability of a trained workforce to install prefabricated components

Factors preventing modular construction:

  • The owner is not interested in a modular approach
  • The availability of modular component manufacturers
  • Our project types are not applicable for modular construction
  • The project delivery method prevents effective modular use planning
  • The availability of a trained workforce to install modular components

Despite some uncertainty here and there, it’s gripping marketplaces.

A 2019 McKinsey report on modular construction highlighted that demand will be driven by labor and housing shortages — e.g. Australia, UK, Singapore — and the U.S. West Coast.

The field has the potential to deliver $22 billion in annual savings for the European and U.S. markets, and could scale to an industry that represents about $130 billion in US and European real estate by 2030.

“Modular projects likely to deliver the greatest cost savings are those that have the highest proportion of labor-intensive activities and the greatest levels of repeatability,” the firm said.

Market dynamics are one thing. Conversations are another.

Talk to us about it. Our technical representatives can speak to how we’re approaching tailored solutions in prefabricated wall panels and offsite construction.

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