Ed Hudson, MBA
September 4, 2020
Offsite Construction is the Answer—But, to Which Question?
A lot of attention has been given to offsite building solutions in recent years, and data show that it’s quickly making inroads in multifamily and commercial construction. Offsite construction has also been touted as a solution to the shortage of skilled construction labor that has hampered housing production in the past few years. Large single-family builders have told us repeatedly how difficult it has been to keep up with housing demand because they can’t get homes built fast enough – they attribute this to the tight schedules of subcontracted labor who can’t find enough skilled workers to keep up. NAHB reports that the average cycle time for building a single-family home has increased from 6 months to 7 in the past few years.
So, is offsite construction the solution to the skilled labor shortage in home construction? To get home builders’ opinions on the matter, Home Innovation conducted in survey of more than 450 builders in late April 2020 where we asked respondents:
“Prior to COVID-19, what did you think was the best long-term solution to reduce the impact of skilled construction labor shortages?”
Source: Responses from Home Innovation Research Labs' Builder Survey, April 2020.
Resoundingly, builder respondents said the answer to this question lies in recruiting and training the next generation of workers. Builders were subsequently asked who is best able to lead the restoration of the skilled construction labor pool in their specific market area. The #1 answer was high school vocational training with nearly 40%; followed by the trade contractors themselves with a little more than 20% of responses. Building industry and trade associations came in third among possible responses.
Some builder respondents expressed concern about vocational schools being shut down due to COVID-19, thus putting a damper on this ready-to-hire pool of skilled labor. Many also said the younger generation was still not interested in (or prepared for) learning a trade or working in the construction industry. On the positive side, some builders theorized that COVID-19 may increase the number of new workers to construction trades due to layoffs from other industries, particularly food service. Also, some think that the open-air, uncongested environment of the construction site may be a great alternative for those wanting to minimize one-on-one contact with people (and the viruses they may carry). Some believe that COVID-19 and the government’s labeling of construction as a “necessary” job in most areas will make it more attractive to younger workers seeking good pay and employment stability.
With regard to offsite construction, some respondents believe it could actually exacerbate worker issues — the current workforce may be resistant to retraining for offsite methods, like panelization, particularly when the workforce is currently rife with work. More details of this survey will be featured in the September/October 2020 issue of Professional Builder magazine, which will be available online October 1st – be sure to check it out.
While there may be other ways around the skilled labor shortage than offsite methods, it doesn’t discount the fact that offsite construction potentially solves many other issues the industry is experiencing, such as the housing availability and affordability crises. Perhaps offsite is the best way to gain back the month of construction cycle time builders have lost in recent years. Or it may be the answer to the, “how do we create better homes and have fewer quality issues?” dilemma. Or, “how do we make the construction process more manageable?” Or, “how do we best address the growth of regulatory hurdles to building?” Or maybe even, “how do we contain runaway costs in light of the increased cost of building materials?”
NEW SURVEY SEEKS ANSWERS TO WHAT REALLY DRIVES ADOPTION OF OFFSITE CONSTRUCTION
Home Innovation is fielding a new survey in September to help us understand the primary advantages of, and key reasons why, builders have or will adopt offsite construction methods. This survey is timely, particularly in light of the new market environment created by COVID-19. The survey will ask builders how they see their businesses evolving to adopt offsite methods in the coming five years; what they see as the primary benefits of offsite methods; and how COVID-19 has changed their thinking. The full findings of this study will be presented at a webinar hosted by NAHB’s Systems Building Council on September 24, 2020. Interested in participating? Let me know.
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