Contractors expect prefabrication and modular construction to increase

Q1 2020 Commercial Construction Index | USG Corporation + U.S. Chamber of Commerce

The USG + U.S. Chamber of Commerce Commercial Construction Index (CCI) is a quarterly economic index designed to gauge the outlook for, and resulting confidence in, the commercial construction industry.

Recognizing a need to highlight the important contributions of this sector to the nation’s economy, USG Corporation and the U.S. Chamber partnered to produce this first-of-its-kind index.

Each quarter, contractors across the country are surveyed in order to better understand their levels of confidence in the industry and top-of-mind concerns.

Inspired by increasing industry attention to the potential of offsite construction, this quarter’s survey focused on whether contractors perceive the growth in these methods to have a potentially disruptive influence on the building product manufacturers, distributors and suppliers in the industry.

First, contractors were asked whether growth in prefabrication and modular construction will produce a new type of supplier who provides modular, prefabricated assemblies that will ultimately reduce the quantity of building products and equipment that contractors procure from traditional manufacturers and distributors. Over one third believe that this will happen. Most who agree expect this disruption to arrive relatively quickly, with 73% expecting to see it occur in five years or less. I

In addition, almost one-third (30%) of contractors are also expecting to see increased modularization lead to the rise of vertically integrated design/manufacture/ assembly companies. This will be a direct competitor to their own businesses, and most (65%) expect it to occur in the next five years.
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Offsite construction methods in commercial construction – Contractors using either prefabrication or modular construction on at least 25% of projects expect to increase their use by 2023.

Q1 2020 Commercial Offsite construction methods

To read the full Q1 2020 Commercial Construction Index, click here.