SmartMarket Report Prefabrication and Modularization: Increasing Productivity in the Construction Industry Premier Partners: Partners: SMR0411_Cover.indd 1 4/29/11 12:37:00 PM ■ Design and Construction Intelligence SmartMarket Report McGraw-Hill Construction Prefabrication and Modularization: President Increasing Productivity in Keith Fox the Construction Industry Vice President, Product Development SmartMarket Report About McGraw-Hill Kathryn E. Cassino Executive Editor Construction Harvey M. Bernstein, F.ASCE, LEED AP McGraw-Hill Construction McGraw-Hill Construction Research & Analytics/ Editorial Directors (MHC), part of The McGraw-Hill Industry Insights & Alliances John Gudgel Companies, connects people, Michele A. Russo, LEED AP projects and products across the Vice President, Industry Insights & Alliances Managing Editor design and construction industry, Harvey M. Bernstein, F.ASCE, LEED AP Donna Laquidara-Carr, LEED AP serving owners, architects, Senior Director, Research & Analytics Director, engineers, general contractors, Burleigh Morton Design & Production subcontractors, building product William Taylor manufacturers, suppliers, dealers, Director, Partnerships & Alliances John Gudgel Art Director/Production Manager distributors, and adjacent markets. Alison Lorenz A reliable and trusted source Director, Green Content & for more than a century, MHC Research Communications Contributing Art Directors Michele A. Russo, LEED AP Segal Savad Design has remained North America’s Harry Segal, Principal/Creative Director leading provider of construction Reproduction or dissemination Alex Flannery, Designer project and product information, of any information contained Editor plans and specifications, industry herein is granted only by contract Enver Fitch, LEED Green Associate news, market research, and or prior written permission from industry trends and forecasts. In Contributor McGraw-Hill Construction. recent years, MHC has emerged Bruce Buckley as an industry leader in the Research Project Manager Copyright © 2011, McGraw-Hill critical areas of sustainability and Dana Gilmore, MRA, PRC Construction, ALL RIGHTS RESERVED interoperability as well. Research Analyst In print, online, and through Mevhibe Barton events, MHC offers a variety of For further information on this tools, applications, and resources SmartMarket Report or for any that embed in the workflow of our in the series, please contact: customers, providing them with McGraw-Hill Construction the information and intelligence Research & Analytics they need to be more productive, Crosby Drive, Suite 201 successful, and competitive. Bedford, MA 01730 Backed by the power of Dodge, 1-800-591-4462 Sweets, Architectural Record, [email protected] Engineering News-Record (ENR), GreenSource and SNAP, McGraw-Hill Construction serves Environmental Benefits Statement: This report is printed using more than one million customers soy-based inks on New Leaf ReincarnationMatte, made with 100% recycled within global construction fiber, 50% post-consumer waste and processed chlorine-free with a community. To learn more, visit cover on New Leaf Primavera Gloss, made with 80% recycled fiber, 40% us at www.construction.com. post-consumer waste, processed chlorine-free. By using this environmentally- friendly paper, McGraw-Hill Construction saved the following resources (calculations provided by New Leaf Paper, based on research conducted by Environmental Defense Fund and other members of the Paper Task Force): 20 fully grown 9,200 gallons 6 million 559 pounds of 1,910 pounds trees of water BTUs of energy solid waste of greenhouse gases SMR0411_Masthead.indd 2 4/29/11 1:28:54 PM SmartMarket Report Introduction refabrication and modulariza- Last year, in the Green BIM SmartMarket Y tion are construction processes Report (2010), we looked at the conver- str that the industry has used for gence of the BIM and green trends and centuries. So why in 2011 is found that construction professionals who N INDU PMcGraw-Hill Construction conducting for- use BIM on green projects are more likely ward-thinking market research on what to do model-driven prefabrication than ctio U many consider to be old, well-established non-green BIM practitioners. These green methods used on construction projects? BIM practitioners saw model-driven prefab str Harvey M. Bernstein N Well, to paraphrase the song, everything as a way to design and construct greener F.ASCE, LEED AP O old about prefab and modular is new again. buildings and have a greener site. Vice President E C Industry Insights & Alliances This reemergence of prefab and modular Now, in this , we th SmartMarket Report McGraw-Hill Construction N I as a “new” trend is tied to the rise of BIM take a new look at prefabrication and Y and green building, critical new trends modularization and their impact on a major it V identified by McGraw-Hill Construction and initiative within our industry—improving cti other industry leaders. productivity. Through an Internet survey DU The emergence of building information of hundreds of AEC professionals, we ro modeling (BIM) is influencing design and gathered data on the impact of prefabri- P G construction processes and how project cation and modularization on key industry N si teams collaborate. In the Business Value productivity metrics including project EA of BIM SmartMarket Report (2009), we schedules, costs, safety, quality, eliminat- cr found that a key benefit of BIM is enabling ing waste and creating green buildings. the increased use of prefabrication and Some of the most significant productivity John E. Gudgel N: IN Director, modularization, which in turn improves findings from prefabrication and modular- Partnerships & Alliances tio worksite productivity and overall project ization users include the following: McGraw-Hill Construction ZA ri ROI. Contractors were especially excited, ■■66% report that project schedules are with 77% believing that BIM would allow decreased—35% by four weeks or more. DULA them to use prefabrication on larger, more O complex projects in the future. ■■65% report that project budgets are The phenomenal growth in green build- decreased—41% by 6% or more N AND M ing has also had an undeniable impact on ■■77% report that construction site waste the construction industry. Just last year, in tio is decreased—44% by 5% or more. A Green Outlook 2011 we estimated that up to 35% of new nonresidential construction We would like to thank our premier part- bric is green, representing a $54 billion market ners including NIST, the Modular Building Donna Laquidara-Carr, EFA Ph.D., LEED AP R opportunity that will grow to $120 billion or Institute, Island Companies, and Syntheon; P Manager, Green Research more by 2015. and our other corporate & association part- and Communications ners for supporting this study. McGraw Hill Construction Harvey M. Bernstein, F.ASCE, Professor with the University of ability. He has over 17 years of direction, analysis and content LEED AP, has been a leader in Reading’s School of Construction experience in technology project to the SmartMarket Reports, the engineering and construc- Management and Engineering in management in the computer and examining critical construction tion industry for over 30 years. England. Bernstein has an M.B.A. telecommunications industries. trends including BIM and green Currently, he has lead responsibil- from Loyola College, an M.S. in John has an M.S. in eCommerce building. Previously, with MHC’s ity for MHC’s market research engineering from Princeton Uni- from George Mason University, Dodge division, she has nearly group as well as MHC’s thought versity and a B.S. in civil engineer- an M.S. in Telecommunications twenty years of experience in the leadership initiatives in areas such ing from the New Jersey Institute from the University of Colorado construction news industry. Since as green building, BIM, interop- of Technology. and a B.S. in Geological Engineer- 2005, as Editorial Training and erability, innovation and global ing from the Colorado School of Policy Manager, she educated a construction markets. Previously, John E. Gudgel is responsible for Mines. team of over 250 reporters on key Bernstein served as the President managing MHC’s relationships trends in the industry, including and CEO of the Civil Engineer- with both national and regional Donna Laquidara-Carr, Ph.D., public-private partnerships and ing Research Foundation. He industry associations. He also pro- LEED AP, has been Manager of the evolution of project delivery currently serves as a member duces and offers thought leader- Green Research and Communica- methods. Donna has a Ph.D. from of the Princeton University Civil ship on construction technology, tions at McGraw Hill Construc- Tulane University, an M.A. from and Environmental Engineering managing MHC’s SmartMarket tion since December 2008. In that Boston University and a B.A. from Advisory Council and as a visiting Reports on BIM and Interoper- capacity, she provides editorial Middlebury College. McGraw-Hill Construction 1 www.construction.com SmartMarket Reports SMR0411_Letter-bio.indd 1 5/2/11 3:11:15 PM SmartMarket Report PREFABRICATION AND MODULARIZATION: INCREASING PRODUCTIVITY IN THE CONSTRUCTION INDUSTRY TABLE OF CONTENTS 4 Executive Summary 4 Executive Summary 6 Recommendations 7 Data 8 Market Activity and Opportunity 8 Sectors with Opportunity for Prefabrication/Modularization 10 Building Sectors with the Most Significant Future Opportunity for Prefabrication/Modularization 12 Users