Offsite Prefabrication Increases As Construction Workforce Decreases

As the workforce shifts from baby boomers to a millennial generation majority it is putting the AEC industry in a dilemma. While the demand for construction projects continue to increase each year, contractors are struggling to find the necessary manpower. With all of the advancements in technology it has appeared to have left a void in the people attracted to performing skilled labor jobs outdoors. Obviously the high wages, career advancement opportunities and secure employment has not been enough to get people interested in the construction workforce industry.

This lack of interest in construction has resulted in 90% of contractors nationwide reporting at least some difficulties in finding skilled workers. Most people in the AEC industry agree that the workforce shortages have gotten worse over the last year and are not expected to get any better within the next two years. While this hasn’t been enough to attract new workers to the industry there is silver lining for people already apart of the skilled labor force.

Increase in Salaries for Skilled Labors

The salaries for production staff in residential construction has increased 5% over the last year. This increase was necessary to get people interested in replacing the now retiring baby boomers jobs. The expected median annual wage of $60,000 for skilled laborers has left contractors looking for cheaper and more reliable ways to complete their projects. This has led to an increase in alternative construction solutions that improve labor productivity and project efficiency.

More than half of contractors nationwide said that their companies use some type of prefabricated components to gain a competitive edge in the marketplace. Still the number one driving factor for using offsite prefabrication was the lack of available skilled labors.

“Access to skilled labor is a continued concern, which has led contractors to increasingly seek solutions that help offset jobsite challenges,” said Jennifer Scanlon, CEO of USG Corporation. “There is significant opportunity to introduce innovations that confront jobsite efficiency and strengthen the industry – such as solutions that enable prefabricated and modular building components.”

Offsite Prefabrication Benefits to Contractors

    1. Quickly Fulfilled. Fast construction speeds with more predictable labor over traditional methods. Building components offsite and out of the weather leads to increased speed, consistency and quality projects. Prefabricated components can be completed in a little over half the time compared to building onsite.


    1. Simplified Solution. No reason to add to the stressful demands of completing a construction project. Prefabrication has less moving parts since the engineering, building, transporting and installing is all done by one company.


  1. Growth Opportunity. Offsite prefabrication gives contractors the ability to handle more projects simultaneously. They no longer have to worry about the challenging labor market and can accept projects with confidence of meeting deadlines.

The prefabrication and modular building industry is continuing to grow but might not be feasible for some geographic locations. CEO of AGC, Ken Simmons says “It’s hard to get enough volume of business in a given location to keep a (component) factory.” Mr. Simmons goes on to explain hurdles some contractors have in using offsite prefabricated components. “Contractors have a lot of site conditions, local building codes and union rules to contend with.”

Contractors have for the most part still been able to meet project deadlines within their budgets. Construction projects continue to increase and the construction workforce continues to decrease. Eventually something has to give. The offiste prefabrication business should continue to grow and more contractors will adopt their strategies.

Please leave comments about the shortage of labor force and how it is affecting the prefabrication industry: