Q1 Commercial Construction Index prepared by the US Chamber of Commerce and USG Corporation lays out some good news and bad news for general contractors. What may surprise many is they are at risk if not already falling behind the competition.
The good news is: Of the contractors using prefabrication/modularization, 70% report experiencing eight key benefits, which include improved labor productivity, reduced schedules and lower construction cost. That means such contractors have discovered an innovative method to help them complete projects faster and less expensively, despite skilled labor shortages throughout the U.S.
Now for the bad news: Those same factors also are among the top ones that contractors that are not using prefabrication/modularization say would encourage them to use these methods. For such firms, that means they know what factors would make them successful, but they have not yet implemented the construction methods their competitors are using to boost their business. In short, they’re falling behind the competition.
From our work with GCs, one of the confounding issues that delays their adoption of prefabrication/modularization is the polarizing nature of prefab’s cost savings. Contractors that merely ask their subs for credits to consider prefab are not doing enough. They are loading the dice to say “no” to prefab when they put the entire decision in the subcontractor’s hands, where “turf protection” and resistance to change tip many subs toward a no. At the same time, GCs can be reluctant to push a change in methods if their relationships with certain subs go back many years.
One of our recent blog posts cautioned developers that they can’t get modular construction if they don’t ask for it. In a similar vein, GCs won’t achieve the measurable benefits of prefabrication/ modular if they don’t actively pursue it.
To make the switch to prefab construction and find ways to work out the details with your subs, contact us, to start the conversation: [email protected]