No matter how hard any contractor works toward being organized and efficient, there are more significant issues at play that cause projects to go over-budget and over-schedule these days. Whether it’s the critical labor shortage or incomplete project designs, there are plenty of competing issues to slow down any project.

But you won’t find many people pointing fingers at offsite construction methods. Not only is the modular construction model gaining ground with nearly 90 percent of contractors using it for at least part of their work, but it’s predicted to grow to $157 billion by 2023.

Offsite—which includes prefabricated and modular—has an impressive potential to lower costs and compress project schedules by 30 to 50 percent. Much of this growth is connected to the need for complex structures at affordable rates due to urbanization and the desire for sustainable construction methods, according to the 2018 National Institute of Building Sciences study.


Understanding Prefab and Modular Construction

While offsite construction has been around for decades, its ability to deliver projects faster and cheaper is driving much of this interest. Owners and contractors, who are hard-pressed to find enough craft workers, have started to embrace this project delivery approach in a big way.

Before we take a closer look, let’s review the different types and terms:

  • Offsite construction is an umbrella term for prefab and modular. According to the NIBS, offsite construction involves planning, designing, fabrication, and assembly of a building at a location other than the actual area for rapid assembly at the site.

  • Prefab construction is any structure that has its section designed in a factory. As a result, both modular and pre-manufactured structures are considered prefab construction. Also, prefab must meet state and federal building codes and undergo regular inspection.

  • Panelized construction is another type of prefab. All the exterior walls are installed on-site with some arriving with windows and doors already installed. This can vary with manufacturers.

  • Structural Insulated Panels are another form of panelized construction. These are panels that generally have two oriented strand boards that are fused with a type of insulating foam in the center. The boards are “locked” together and structural without the need for wood framing, which can be a vehicle for air infiltration. SIPs are extremely energy efficient, are installed very quickly, and require fewer interior walls, which creates a very open interior area.

  • Modular construction falls under the broad idea of prefab construction. This is where whole structures are built in 3-D boxes or in the form of modules and transported to the jobsite. These can be temporary structures like construction site offices or permanent ones like banks, schools, and hospitals.

For example, with modular construction, the structure can be fabricated in a modular construction facility while the project jobsite is being prepped for the structure installation. Instead of a traditional jobsite where these projects happen one after the other, work can be done simultaneously—reducing project lead time up to 50 percent.


Offsite Construction Becoming Mainstream

The NIBS study completed by its Off-Site Construction Council showed that 87 percent of participants had used some form of offsite construction in the previous 12 months and more than 81 percent planned to do so in the future.

The 205 survey participants—construction managers, general contractors, engineers, trade contractors, architects, owners, and developers—noted that offsite is being used for everything from commercial construction, industrial, healthcare, education, multi-family, hospitality, single-family, and data center construction.

Despite the level of engagement required, the survey noted that offsite projects resulted in high-quality outcomes, fewer changes, streamlined schedules, and lower costs. When asked who is making the decisions regarding off-site use, the results were interesting:

48 percent said the construction manager or general contractor;

63 percent said designers, architects, and contractor;

41 percent said clients;

21 percent said subcontractors.

With GCs and construction managers most often making the decision to pursue offsite, the study concluded that current decision-makers and owners may need to be educated on the value of off-site construction.


Overcoming Barriers for Offsite Benefits

In stark contrast to traditional construction, offsite is regarded as less time-consuming, sustainable, safe, cost-efficient, and flexible. But the NIBS study also found that some long-term projects may not be as well suited for prefab elements. They cited barriers to offsite construction like the distance of the factory to the construction site, last-minute design changes, and the construction industry’s reliance on traditional methods.

For many contractors, it is appealing to think of how offsite construction methods can improve project time, cost, and quality. It appears offsite construction could potentially deliver what is sorely missing in the construction industry: predictability.

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