Pre-fabrication: The Current State of the Pre-fabricated Buildings Market

The pandemic affected the general construction industry so much that a decent chunk of its revenue last year was lost. However, some sub-sectors are arising, and one of them is the prefabricated buildings sector.

Prefabricated buildings are becoming the norm because of the pandemic. People are heading towards DIY projects because of the lack of manpower in the sector. Furthermore, they are also choosing prefabricated homes because of increased home prices during the past few months. There are many reasons why this sector is growing, and we’ll go through them one by one.

The Problem with the Construction Industry

Lack of Manpower

The construction industry is in dire need of manpower. Last year, about 27% of construction firms were forced to lay off employees to sustain themselves. A much higher number has applied for government grants and programs such as the Paycheck Protection Program given by the government.

This lack of manpower is problematic for any firm because without manpower, projects are held back, and revenues are withheld when projects are held back. However, that’s not the only problem that the construction industry is experiencing. Another problem is the lack of projects.

Lack of Projects

So aside from manpower issues, the industry itself is experiencing a lack of projects in the sector. A couple of years ago, the industry was projected to have at least $100 billion in their projects alone. However, that all were either delayed or canceled due to strict quarantine protocols.

Quarantine protocols have forced projects to be delayed for at least one month. Others were canceled entirely. This was problematic for firms trying to stay afloat because most of their revenue relies on those projects being finished.

Increased Prices on Construction Materials

Lastly, construction materials are becoming more expensive each passing month. Quarantine protocols have affected shipping and logistics worldwide, leading to many delays and inevitable circumstances such as damages. Because of rising demand but the lack of supply, suppliers are forced to increase prices until the market stabilizes. This doesn’t stop some from purchasing said items, but it comes with a great cost.

construction site

What Makes the Prefabricated Building Markets Good?

Fewer Manpower Required

The prefabricated buildings market requires less manpower on-site. In most situations, the people who would build the prefabricated building is up to the consumer themselves. Most of the manpower is found in manufacturing sites and production yards. Still, because most processes are automated nowadays, fewer people required to work there are lessened.

This sub-sector is highly dependent on technology, and this has bode well for this particular sub-sector. Now, most of the processes are automatized. As a result, it doesn’t have to worry about the shortage of manpower that the entire industry is experiencing.

Cheaper Production

We all know that prefabricated buildings and homes are much cheaper. One of the main reasons for this is because a huge amount of manpower isn’t necessary on-site. In some situations, customers are the ones who look for the necessary manpower to build their structure.

However, this doesn’t mean consumers in this market are sacrificing looks for cheaper materials. For example, when it comes to garage kits, garage kits with an oak frame have always been a robust choice for many consumers, creating a demand for oak-based materials. This means that consumers have a growing for resilient and sturdy structures without sacrificing their looks.

Entering the Prefabricated Buildings Market


You’re going to need a lot of investments when starting your own company in this market. The average investment required is around one million dollars. That’s a huge amount, and it goes directly to equipment and materials. Many angel investors are looking to invest in this market, and they might even teach you a thing or two about the market.


Once you’ve gotten the necessary investments for your company, you’re going to need to concentrate on manufacturing. This is where a bulk of your inventory comes from, so most of your hard work should be placed into streamlining the process and making it much cheaper.

This will be the backbone of your company, and it’s going to be the main reason your brand will grow. But when it comes to manufacturing, you should first start with something small, like home extensions.

Start with Home Extensions

You won’t be building pre-fabricated homes as of yet. They are too expensive for your current budget, and you should only do it when you have orders. Leave this one to bigger companies as of the moment. What you should concentrate on are home extensions.

Home extensions such as garages, greenhouses, and sheds should be your main priority. These extensions are easy to make and sell in today’s market. Sure, you might not get a big payoff from selling these, but at least you get a constant stream of revenue from them. Once you’ve grown, then that’s when you should start working into mass-producing pre-fabricated homes.

The prefabricated buildings market is booming because of the reasons we’ve listed above. It’s a great place to penetrate the construction industry. By getting the necessary investments and manufacturing home extensions, you should transition into one of the biggest companies in the sector.

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