Listen to “A Podcast That Builds” host Ben Johnson and Dodge’s Donna Laquidara-Carr discuss prefab construction in construction. Below is a transcript of this construction podcast.
Ben Johnson:
Hello and welcome to the seventh episode of “A Podcast That Builds”, keeping you in the know with news trends and analysis that will shape the future of building. And we’ll get right into it today with our guests. Donna Laquidara-Carr. Welcome Donna.
Donna Laquidara-Carr:
Thank you, Ben. I’m fairly pleased to be here today.
Ben Johnson:
So as our listeners may already be aware of the CCI, the Commercial Construction Index is a quarterly report put out by Dodge with the USG and the US Chamber of Commerce. And in every quarter, there is a special spotlight on a particular topic. And for Q1 2018 the spotlight was on prefab construction and modular construction. And that’s the topic of today’s show. So why prefab construction and why this quarter?
Donna Laquidara-Carr:
Well you know, we’ve seen, we’ve been looking at prefab building for a few years now at Dodge. Now of course, this has been an accepted practice in the industry for a very, very long time, but there a renewed interest in it in the last, I would say at least five years for several reasons. One of the most current ones of course is the concerns about Labor that you and I have talked about in previous podcasts quite significantly. Another is just the general desire to improve productivity in the construction industry, which a lot of international studies still demonstrate is not catching up to other, other industries around the world. And then finally we have really seen greater interest in prefab construction because of the rise of building information modeling and the way that models can help produce prefab construction. I help support the effort for prefab construction. So, and there’s also, while I don’t think these are exactly drivers for prefab construction, we do see prefab construction linked to several key trends in the construction industry.
There’s two in particular I want to point out. One is sustainability. Now I think everyone associates prefab construction in construction with reducing waste for obvious reasons. And certainly, that’s incredibly important in terms of trying to get projects more sustainable. But in addition to that, you really do see ’em when we’ve, we’ve done case studies in the past, we’ve really seen that the building envelope performance can also be significantly improved at the building envelope is prefabricated, tighter seals on buildings can lead to major energy savings. So that’s been an interesting way that prefab construction ties into a key trend. The other one is safety. We just in our recent smart market report on safety, looked at something called prevention through design. The goal is to make buildings safer earlier on in the design process by really considering what impacts safety onsite and prefab construction is a critical strategy for that approach. You know, it’s safer because it’s done on a factory floor rather than at heights, you know, on a ladder. All kinds of things can happen. Also, you know, you’d sometimes it’s just the question of the crowded job site. You’ve got different trades mingling and working together. It’s much safer and easier to have these things built in a very much more controlled environment.
Ben Johnson:
Absolutely. So, based on the study you did, how prevalent is the use of prefab construction in construction?
Donna Laquidara-Carr:
Well, I think most of the best data that we have on that is actually the responses of the general contractors. 62% of whom said that they are using prefab construction currently. Now we did also ask this of trade contractors. We saw a much lower response. Only 33% of them said they were using prefab construction in construction. But if you think about it, that makes sense. There’s a lot of trades. Say for instance, painting or excavation or prefab construction really just isn’t that relevant to their work, so they’re less likely to report it. So that’s why we look at that 62% of the general contractors and feel like that’s capturing the level of activity in the market.
Ben Johnson:
So, what is the trend on prefab construction in construction? How does this compare to, to pass, to use?
Donna Laquidara-Carr:
Well, we don’t have exactly equivalent figures to what we asked here, but we did ask a question to them about how much they had, how they’d seen the changes in the use of prefab construction. 45% of those using prefab construction in this study said that its use on their projects had increased in the last three years. That’s a pretty substantial figure. So, and nearly all the rest said it stayed the same. So, you know, we do think that you can, you can point to that as a trend line for increasing in the industry. And then even more importantly, 67% of contractors, GC’s in particular, sorry, said that they expect an increase in the demand in the next three years. So, we definitely see this from their reporting as a chart going up, you know, of the, the, the levels of prefab in the industry,
Ben Johnson:
What project sectors is prefab construction, seeing the greatest use and what is typically prefabricated on a project?
Donna Laquidara-Carr:
Well, the top sectors in this study that emerged for prefab construction were motels, healthcare, manufacturing and multifamily. And most of those were not really a surprise. A lot of times when they’re looking at a project and determining if prefab construction is a good strategy, one of the key things that they look for is spaces that are reproduced over and over again. So, hotel rooms, patient rooms, even apartments or bathrooms within apartments, you’ll see those being particularly well suited for prefab construction. Also, another factor, especially for healthcare in particular are the racks of complicated mechanical, electrical prefab construction has been a really important strategy as hospitals have been getting more and more complicated to help get all of that stuff up into the ceiling. And over half of those doing prefab in this study said that they were using it for exterior walls, building superstructure and mechanical, electrical and plumbing building systems.
Ben Johnson:
So obviously use is going up. But what are the benefits of the contractors are experiencing from using prefab construction in construction?
Donna Laquidara-Carr:
Well, we really did feel this was one of the most impressive findings in the current study. We asked about several potential benefits in this study and 70% or more of the contractors said that they were experiencing eight separate benefits. It’s rare on studies that we’ve done in the past to see that high of a percentage selecting that many benefits. So, a really, there’s a lot of agreement about what they’re seeing that they really think prefab construction is helping them. So, the top two benefits they reported were increased efficiency, which we’ve already talked about as a key priority. And improved labor productivity and those are reported by 89% and 85% respectively. So obviously both of these are critical to address the current workforce shortages and a really, I think creating a laser focus on prefab construction right now. In addition to that, you know, the things that impact owner’s satisfaction with their projects seem to be emerging as top benefits.
So, you know, when we’ve done separate studies with owners, they really care most about schedule cost and quality in terms of the kind of satisfaction they have with the work that’s done for them and all three of these benefit from the use of prefab construction. We also have talked already a little bit about safety and safety has always been a top priority for contractors. And in particular I think there’s been a very sharp focus on it in the last decade or so. And we do find that contractors are really noting that a safety is improved by the use of prefab construction. Then finally we do see 79% saying that it eliminates waste. And again, we already talked about how that is important for green projects.
Ben Johnson:
So that’s a lot of benefits. A so why, why would some contractors not be using prefab construction now?
Donna Laquidara-Carr:
Well, as we already mentioned, you know, there’s some trades that just don’t get involved in it, but we, when we asked the contractors who said they weren’t doing prefab construction, why they’re not, the reasons had not had very little to do with their own volition. A lot of them said that the types of projects that they work on are not applicable for prefab construction. That was over half of those who are not doing it said that that was the top reason. Other top reasons mentioned by about a third of the participants are that architects aren’t designing it into their projects, so they’re just not getting that opportunity to do it or that owners aren’t requesting it. So, they’re really looking to the rest of the industry to help them engage more in prefab construction. It isn’t a question that they themselves are resisting it.
Ben Johnson:
So, what can the industry do to increase its use currently.
Donna Laquidara-Carr:
Oh, so we did, we did ask those same contractors who aren’t using it now. What would encourage them to use it more. And it’s interesting, most of the top factors that they mentioned are the same benefits I just talked about. It’s things like cost saving, increased labor productivity, reduced schedule. That’s what they say would increase it and yet that’s already being reported. So, it appears that from a contractor’s perspective to really move the needle, either it’s more knowledge that this is going on or more likely they just really feel the need again for that external influence to drive them to use it. So, you know, they, one of the things as I mentioned before that they pointed to is, oh, architects aren’t designed to get into their projects. In a recent safety study that we did, 83% of architects that they work with GC’s and key trades early in the design process to identify opportunities for prefab construction.
So quite a few architects do seem to be aware of the value of prefab construction in construction and now this isn’t on the majority of their projects. And perhaps that suggests that more integrated projects could really help ultimately with finding greater opportunities for prefab construction because it seems like the team can do it better than the individual players. In addition to that you know, again, we have that note that owner’s required, not requesting prefab construction is a big obstacle. So, you know, I think that that’s the other thing. And really since owner’s control, the team, the way teams are put together in some ways, surprisingly, the whole thing does kind of focus back on owners helping to drive it in the industry.
Ben Johnson:
So, thank you as always, Donna for this great look into this, not new, but certainly a developing trend in construction.
Donna Laquidara-Carr:
All right, well, thank you for having me.
Ben Johnson:
Thanks for joining us today. To download a free copy of the report referenced in today’s show, visit construction.com, and you can contact Dodge at construction.com or (877) 784-9556. We’ll see you next time.