Benefits of Prefabrication and Modular Construction

As the world faces new challenges presented by the COVID-19 pandemic, construction contractors continue to struggle with a number of old challenges within the industry.  According to the quarterly report published by the United States Chamber of Commerce (Chamber), the commercial construction industry’s biggest obstacles are the challenges created by the COVID-19 pandemic.  However, challenges such as a lack of skilled workers and sunk costs associated with delays continue to impact the industry in a material way. 

According to the Chamber’s second-quarter report for 2020, nearly 90% of contractors surveyed expressed, at minimum, a moderate level of concern as it relates to hiring seasoned workers who possess the appropriate skill level.  Interestingly enough, with unemployment currently in the double digits, this percentage remains remarkably unchanged from pre-pandemic months.  Furthermore, hiring expectations have declined to compensate for the lost sources of revenue anticipated from the pandemic.  In addition to the skilled labor shortage, over 85% of contractors report experiencing some type of delay in construction within the last three to four months.  With global supply chains being continually uprooted due to the virus, and contractors bearing much of the cost, the effects of delays in construction pose a significant risk to contractors. 

One possible solution to the challenges presented is the growing acceptance and utilization of prefabrication and modular construction.  As major advances continue to be made in the prefabrication and modular construction process, more contractors are seeing these processes as viable options. These methods, coupled with advances in Building Information Modeling (BIM), which gives the tools and technology needed to more accurately plan for and execute projects, present opportunities to address the challenges noted above.  According to Dodge Data & Analytics (Dodge), the leading provider of commercial construction data, prefabrication and modular construction has continually shown that outsourcing certain elements of construction to more skilled contractors, can lessen the impact of labor shortages. Additionally, Dodge found in its survey that approximately 90% of respondents who utilize prefabrication or modular construction saw, at minimum, a moderate level of increased productivity and quality.  When mated with BIM, these projects can realize savings due to improved budget and schedule performance. This often means that delays can be avoided and profitability can be increased. 

Prefabrication and modular construction may not be the answer to all the challenges that the construction industry faces: however, it certainly can help contractors continue to grow and remain profitable.  The incorporation of these methods and the appropriate use of technology may lead to more profitable contracts, safer job sites and higher-quality products. 


You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2024 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Postcard from the 38th annual AICPA & CIMA Construction and Real Estate Conference
Construction, ESG BY Matt Hartman
ESG in the Construction Industry: Electrification
“Constructing” Your Estate to Meet Your Needs
New Research and Development Capitalization Requirement Shuffles System
Contractors May Benefit From SALT Cap Workaround
Construction Talent Retention
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.