December Newsletter
By Jesse Etherington
Pro Commercial
December 31, 2024
Modular Construction: The Future of Our Industry?
Modular construction has been mainstream in countries like Sweden and Japan for years. These countries view modular construction as a very sophisticated, innovative approach to construction. On the other hand, in the United States, this type of building has had a slower time catching on. However, with the current challenges of inflation, rising material costs, and labor shortages, it might be time to give modular construction another look.
What Is Modular Construction?
Modular construction involves utilizing prefabricated buildings constructed in a factory and assembling them on-site, like building blocks. The two major benefits are:
- Speed: Traditional timelines for hotels, senior living communities, and multifamily projects can stretch to 12-14 months. Modular construction can cut this down to just three months by allowing site preparation and module construction to happen simultaneously. Some franchises even have modular plans as an option.
- Cost Efficiency: Prefabrication reduces waste, increases productivity, and reduces weather-related delays, all while lowering labor and operational costs.
The Challenges of Modular Construction
Of course, modular isn’t without its drawbacks:
- Transport Risks: Moving modules to the site comes with the risk of damage or delays.
- Customization Limits: Modular designs are standardized, which can make custom designs or last-minute changes tricky and costly.
- Long Lead Times: Producing modular buildings in a factory can’t start until all the materials are available. If there are long lead times on certain materials, this can delay the project from getting off the ground.
Now I want to know: have you tried modular construction? Is it something you’d consider for your next project?
Coming Soon! My Place Hotel in Jonesboro, Arkansas
We’re excited to kick off construction on a My Place Hotel in Jonesboro, Arkansas this January! Last spring, the developers were facing issues with finding subcontractors and budgeting, so they brought us in to help. We took the project out to bid, and our team put our heads together to pull together a plan that worked for both the budget and the timeline. We can’t wait to see this project come to life in 2025!
Commercial Construction Expected to Grow 7% in 2025
2025 is shaping up to be a year of growth, with a 7% increase projected, according to a recent report by ConstructConnect.
What’s driving this momentum? The positive economic outlook and falling interest rates have developers dusting off plans that were put on hold.
Construction Challenges in 2025
While the economic outlook is positive, potential policy changes in 2025 may disrupt labor availability and material costs. Plans to deport undocumented immigrants, who make up a significant portion of the construction workforce, and impose tariffs on imports from Mexico and Canada might lead to significant challenges for those in the industry, including labor shortages and rising material prices.
How to Prepare for 2025
- Secure Pricing Early: Lock in rates with contractors now to minimize exposure to material cost increases and keep budgets stable.
- Confirm Workforce Capacity: Partner with contractors who have a proven ability to secure and maintain skilled labor.
- Stay Updated: Monitor policy discussions and understand how potential changes could affect your projects and region.
Looking to build? Let’s talk!
Jesse Etherington
(641) 257-9286