'Fight for your right to prefab': Can offsite construction revitalize a stagnant industry?

It has many names: offsite, modular, prefabricated. Regardless of its moniker, the practice has seen a kind of renaissance in the last five years, as construction experts search for ways to revamp the frustratingly stagnant building industry.

As part of this renewed interest, the National Institute of Building Sciences, the Modular Building Institute and the Associated General Contractors of America held the first-ever Offsite Construction Expo in Washington, DC, on Sept. 23 and 24. The event, while relatively small, attracted vendors, owners and contractors looking to participate in the growing trend of offsite construction methods.

Henry Green, president and CEO of NIBS, said during the expo, "There is a lasting impression that needs to be made for offsite construction."

Offsite construction includes any building methods that take place in a location other than the site of the project, and can range from precast concrete, wall panels, MEP systems, bathroom pods, and permanent modular building.

Sue Klawans, Gilbane's director of operations excellence and planning, said during the event, "On major projects, at least 35% should be offsite or prefabricated … The general contractor or construction manager is the primary driver of offsite demand."

The commercial sector of the construction industry has seen the greatest demand for offsite methods, especially in the hospitality, student housing and military segments, according to a 2014 survey conducted by the NIBS Offsite Construction Council.


Estimates of the offsite sector's portion of the overall construction industry range from 2-5%. While that is a small section of the total industry, experts expect that number to grow in the coming years as more designers, owners and contractors find value in adopting offsite methods.

Modular madness

The recent resurgence in attention on offsite methods was the result of several factors that experts consider to be holding the industry back from stronger growth.

Several speakers, for example, addressed concerns of the construction industry's lack of a rise in productivity.

"Productivity in the construction industry is flat," Green said. "The building industry is a huge part of the economy. We have to improve our productivity to show our value."

Erik Antokal, director of strategic initiatives for FC Modular, said that although construction has been consistently plagued by high costs of land, labor and materials, it needs to "evolve to address them. They aren't givens."

The construction business has seen its share of highs and lows over the years, as it is still recovering from the devastating recession starting in 2007. "Offsite can be a way to combat volatility in the industry," said Ryan Smith, associate dean at the University of Utah.

See also: Why offsite modular construction is on the rise

Benefits of offsite construction

Proponents of offsite construction champion the method's quicker schedule, higher quality, and often lower cost. Smith performed a study comparing permanent modular construction projects with similar traditional projects. He found that all of the modular projects had shorter build times, with an average 42% less total time from start to finish. And almost all were cheaper, with an average 11% in cost savings.



Offsite construction has also been heralded as providing a safer and more controlled environment for workers. With more building completed inside a closed factory, there are fewer opportunities for high-risk labor needs, such as working at towering heights or during extreme heat.

Worker safety has become a major concern, especially as the ongoing labor shortage is "forcing firms to change how they operate and [posing] risks to workplace safety," the AGC said earlier this month. In the association's survey of 1,358 contractors, 15% of responding firms reported seeing a rise in injuries and illnesses due to a lack of available workers. 

A Bureau of Labor Statistics report released earlier this month also found that fatalities in the private construction industry rose 6% — to 874 — between 2013 and 2014.

The more controlled and safer environment that comes with offsite construction could serve as a much-needed remedy to the rise in workplace fatalities and injuries, speakers noted during the expo.

In addition, offsite construction building methods can result in a reduction in waste on a project, as managers can order the exact amount of materials they need. Antokal said the builders working on FC Modular's current project saw a significant decrease in the amount of wasted materials.

Green added that the planning stages in offsite construction, as well as the use of Building Information Modeling, can result in less money lost through project waste. "We can utilize it to be closer to a zero-waste scenario," he said.

High-rise built 'like Legos'

FC Modular, along with developer Forest City, is currently in the process of constructing what will be one of the tallest modular buildings in the world, at 32 stories, in Brooklyn, NY. Building the 461 Dean Street, or B2, project is "like Legos," Antokal said.

The modules, made of structural steel, are built in a production facility and then transported to the site. "We're on a new frontier of what's possible in high-rise construction," Antokal said.

Although the project has been mired in contractor, legal, and some structural problems, it is currently on track to be completed next year.

461 Dean Street high-rise modular building

Obstacles for expansion

With all of these proposed benefits, what's holding back offsite construction from becoming a larger part of the overall industry? Respondents in the NIBS survey reported the most significant barrier to implementing offsite methods was the design and construction culture, followed by distance from factory to site, program of the building, transportation, and industry knowledge.


"What stands in our way?" asked Klawans. "It's mostly us."

Laurie Robert, VP of sales and marketing for modular builder NRB Inc., added: "We need to transform perception. And we need to get the students."

Green echoed her point, noting that two-thirds of architecture and construction schools never or sporadically teach offsite construction to students.

The change in the traditional building process that comes with offsite methods has also emerged as a deterrent for implementing the approach, as contractors and owners struggle to adapt to the varied timeline of decisions and building.

Robert emphasized that offsite construction is "not a linear process." More decisions need to be made at the early stages of a project, rather than waiting to decide on aspects of the structure at each step. For example, final colors often need to be chosen at the same time as the foundation.

"Pre-fab is a change of mindset from the way we do things. And I think that's a good thing," said RJ Reed, VDC manager for Whiting-Turner Contracting.

What's next for offsite

Expo attendees were cautiously optimistic that the construction industry as a whole would start to warm up to offsite construction as a viable alternative or supplement to traditional building. 

In the NIBS survey, 33% of respondents anticipated using more offsite construction in the next year; 50% anticipated using the same; and 9% anticipated using less.


Reed said he believes every construction project should have at least a discussion to determine which, if any, components of the project could be built offsite. "Opportunities for a full offsite project are rare," he said. "But we look for a hybrid approach," implementing both traditional onsite and offsite methods.

During Klawans' speech, she invoked the Beastie Boys and enthusiastically sang, "You gotta fight! For your right! To prefab!"

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Filed Under: Commercial Building Residential Building
Top image credit: Emily Peiffer