The adoption and growth of prefabricated building techniques offers opportunities for both builders and distributors.
Construction
Builders and construction firms that can deliver some of the benefits of factory production, while still working within existing supply chains and traditional construction processes, should see robust growth opportunities.
The adoption of mass timber components provides a useful example. Already common in Europe, use of cross-laminated timber (CLT) products is growing rapidly in manufacturing plants and construction projects across the U.S. CLT provides structural strength comparable to steel and concrete but possesses unique advantages compared to those alternatives. It’s lighter, easier to work with, and as a renewable timber product, results in a lower carbon footprint. In addition to convenience and sustainability benefits, CLT offers design flexibility and a warm, natural aesthetic that end users appreciate.
Precast concrete is another winner among prefabricated building products. Used in a wide range of applications, from commercial buildings and public facilities to large infrastructure projects, the versatility of precast concrete expands its market potential. Innovations in design, materials, and manufacturing are leading to more complex and architecturally appealing precast concrete elements for even broader applications.
Increased use of manufactured materials disrupts the traditional construction process, which means that builders need to convert the architects, engineers, subcontractors, and distributors that support these projects to new building methods, effectively building a new “ecosystem” that’s familiar with prefabricated methods and components.
Distribution
There’s an opportunity for lumber and building materials (LBM) distributors to meet the demand for prefabricated products as it grows. Some distributors are already producing roof trusses to serve builders in their local markets, so expanding that production to floor trusses and wall panels is a natural extension. Other distributors are scaling operations, acquiring prefab building component manufacturers to complement—and expand on—their lumber offerings to builders and framers.
In an industry where logistics and just-in-time delivery are prime considerations, distribution networks play a pivotal role in usage rates for prefabricated building components. However, prefabricated component companies are widely dispersed, and the time and cost for delivery increases along with the distance to the building site. These companies need expanded distribution networks to keep costs down and ensure near-instantaneous access to their products.
National chains like Lowe’s and Home Depot are enhancing their prefabricated component inventories. Likewise, mechanical, electrical, and plumbing (MEP) wholesalers are increasingly offering prefabricated MEP components—time-saving products like pre-assembled bathroom pods, pre-wired electrical panels, and pre-piped plumbing systems designed for both residential and commercial projects.
