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Creating a future construction workforce is not as simple as turning a spigot on or off. While expanding skilled craft training programs and forging partnerships with high schools, vocational schools, community colleges and universities represent productive pursuits, the reality is many young workers do not appear inclined to enter the construction trades. Part of this represents a shift in culture that emphasizes educational attainment over the development of practical, compensable skills.

It is important to recognize the situation involves skills shortages as opposed to basic labor shortages. Construction workers are required to deal with many variables, including weather, topography, and the presence of numerous subcontractors, inspectors and other personnel that need to be considered on any given job. Construction managers and sagaciously deployed software can help, but the typical construction worker must possess both construction-specific skills and more broadly defined skill sets such as problem-solving and critical thinking. Finding enough of these workers is challenging under normal circumstances, not to mention the expected rates of retirement during the next decade. 

One potential response is to simplify the onsite construction process through modularization and prefabrication. By bringing construction into a controlled, manufacturing-oriented setting, workers are more likely to be engaged in repetitive tasks that do not change fundamentally from day to day or from project to project. To date, the penetration of prefabrication and modular techniques has been limited in many construction segments. According to FMI’s 2013 Prefabrication and Modularization in Construction Survey, only 40percent of all contractors consider their capacities in prefabrication and modular construction as part of their company’s strategic initiatives. 

Remarkably, despite growing demand for modular construction in key segments such as health care, hospitality and education, as well as the continuous demand for productivity enhancements, evidence suggests prefabrication techniques have made virtually no progress in terms of acceptance by the construction industry in recent years. The FMI survey revealed48 percent of mechanical and electrical contractors had more than 11 percent of their current project work accomplished using prefabricated assemblies. That actually represents a 4 percent decline compared to FMI’s corresponding data in2010.

That said, there is every reason to believe modular and prefabrication processes will gain market share going forward. Last year, among mechanical and electrical contractors that did not own prefabrication facilities, 17 percent were considering it, up from just 5 percent in 2010.Even more telling is the fact that mechanical and electrical contractors currently commit 12 percent of total annual labor hours to prefabrication. In five years, that number could rise to 32 percent based on contractor preferences and expectations. Sixty-one percent of FMI survey respondents expect to see significant expansion in prefabrication facilities during the next three to five years.

Conversion to these processes has been slow for a number of reasons. Many contractors lack the capital necessary to shift to new techniques and to retrain staff, or are simply reluctant to risk that capital in a segment that has yet to be fully defined. Contractors state there needs to be greater uniformity in terms of cost effectiveness before prefabrication can emerge as the norm. While prefabrication and modular construction reduce some budget areas, other costs emerge, (e.g., additional materials required to pack prefabricated components for transport to the construction site).

Moreover, prefabrication and modular rely heavily on a supply chain strategy, with components arriving on a prearranged basis. Historically, construction has not been supply chain-centered, which implies many project managers must be retrained in aspects of production, including methods by which to ship materials or store components.

Looking ahead, there is little question modular and prefabrication processes will be significant elements of the construction industry. In addition to spurring more project collaboration in the form of multi-trade fabrication, it will allow more construction services to be traded globally, with components potentially manufactured in China or India and shipped to the United States and vice versa.


Anirban Basu is chief economist of Associated Builders and Contractors. For more information, visit www.abc.org.