Section 1.2 Impacts of COVID-19 on off-site modular construction nationally and/or globally

Dietz, Robert. “Economic and Housing Market Update.” Webinar from the Anchorage Home Builders Association, September 29, 2020. https://www.facebook.com/myahba/videos/333933314381836/?business_id=966655906725828.

National Association of Home Builders (NAHB) Chief Economist Robert Dietz, Ph.D., gave an overview of national-level trends, risk factors, demographic shifts, and federal economic policy in the housing and labor markets, with an emphasis on the market demand and supply chain impacts of COVID-19 and commentary on how national-level trends relate to Alaska specifically. Dietz predicted that housing would lead a post-pandemic economic recovery due to low interest rates and a “renewed focus on home,” but said approval of a vaccine could actually hurt the housing market if it prompted higher interest rates alongside a drop in demand. Dietz expressed skepticism around gains in the off-site construction industry, noting the sector’s very low share of new construction (3 percent nationwide, down from 7 percent in 1998). Dietz said, “I’ve been saying for years, and I’m sticking by it, that there’s more ‘hype’ than ‘hope’ when it comes to panelized and modular construction.”

Gbadamosi, A.-Q., L. Oyedele, O. Olawale, and S. Abioye. “Offsite Construction for Emergencies: A Focus on Isolation Space Creation (ISC) Measures for the COVID-19 Pandemic.” Progress in Disaster Science 8, 2020. https://doi.org/10.1016/j.pdisas.2020.100130.

This article discusses six common Isolation Space Creation (ISC) measures implemented to slow or halt the spread of coronavirus, including (i) self-isolation at home, (ii) isolation at regular hospitals, (iii) isolation at existing epidemic control hospitals, (iv) isolation at emergency retrofitted temporary hospitals, (v) isolation at Temporary Mobile Cabins (TMCs), and (vi) isolation at newly constructed temporary hospitals.

The authors evaluate modular and offsite construction benefits based on three phases of deployment: (i) construction phase; (ii) pandemic management phase, and; (iii) post-pandemic phase. Advantages in the construction phase include rapid turnaround, scalability, flexibility, and mobility. During COVID, the buildings should effectively minimize risk of transmission, have full fresh air ventilation and state-of-the-art disinfection methods, and be safe and comfortable for recovering patients. Post-pandemic, buildings are assessed for their ease of recovery and repurposing.  

Pilconis, Leah. The Impact of COVID-19 On Construction Workforce. ConstructorCast COVID-19 Special Edition. https://soundcloud.com/agcofamerica/the-impact-of-covid-19-on-construction-workforce.

In this episode of the ConstructorCast podcast, construction industry experts discussed the 2020 Construction Workforce Survey and how the pandemic was impacting sector-wide productivity. One said the pandemic was delivering “a one-two punch to the construction industry”: undermining demand for construction, prompting project delays and cancellations, layoffs and furloughs while also making it hard to hire workers. At the same time, it’s contributing to conditions that make it difficult for most firms to find craft workers to hire.” 60 percent of construction firms responding to the survey reported having at least one project postponed or delayed, and 33 percent reported having at least one project that was already underway halted due to the pandemic, and the number of firms reported project cancellations nearly doubled since the last survey in June 2020. Contractor expectations and confidence varied by region and state, with lowest confidence in the Northeast. Building construction and smaller firms appeared to report fewer project cancellations and challenges filling positions than other sectors (e.g., highway and transportation, utilities) and larger firms. As in other industries, construction firms that recalled previously laid off or furloughed employees had difficulty filling those positions, with workers citing preference for unemployment benefits, fears of workplace safety in relation to spread of the virus, and other family obligations as primary factors preventing them from returning to work. 38 percent of firms reported increasing employee pay in the last 6 months in an effort to attract and retain workers. 44 percent reported projects taking longer to complete and 32 percent reported projects being costlier due to on-site social distancing and public health safety measures.

Procore Technologies. “Construction Activity Index.” Procore Technologies, 2020. https://www.procore.com/ebooks/construction-activity-index.

Procore, the Associated General Contractors of America (AGC), and other industry organizations partnered to compile aggregated jobsite activity data to measure construction activity during the pandemic. The report covers U.S. construction activity to “help formulate a narrative about how construction is trending across the U.S.” It looked at state-level monthly workforce trends, workforce impacts by business size, differences among sectors (infrastructure vs. non-infrastructure), and differences among major metropolitan areas across the U.S.

The Association of General Contractors of Alaska (AGC). “Recap of Current Construction Business Conditions,” 2021. https://www.agc.org/sites/default/files/Files/Communications/Recap_Current_Construction_Business_Conditions_Final.pdf?fbclid=IwAR0Lfoxqbt8uvVOmZaWBAYaXhKlg0_kZMlpdS69OL0am3gL0dYjfgQ4NZg8.

This compilation of memos, newspaper articles, and other resources describing pandemic impacts on the construction industry around the country offers a snapshot of topics like demand impacts, layoffs, and other concerns affecting the construction industry. Reporting related to housing generally discussed concerns over supply and affordability resulting from project delays and cancellations, and special exemptions from even the most restrictive lockdown measures for affordable and market-rate housing projects in efforts to ameliorate these challenges.

Zahalak, Tanya. “Manufactured Housing Landscape 2020.” Fannie Mae, 2020. https://multifamily.fanniemae.com/news-insights/multifamily-market-commentary/manufactured-housing-landscape-2020.

This article covers multi-year trends in the manufactured housing market, including overall number of occupied units, distribution of owner-occupied versus renter-occupied, income distribution of manufactured versus site-built homeowners and renters, comparisons of all-in housing costs and affordability, trends in the number of manufactured homes ordered and shipped over the last 20 years, an analysis of overall market barriers and challenges, and projections of expected impacts of the pandemic.

The analysis concludes that manufactured housing could “meaningfully” increase housing supply nationwide and achieve a projected long-term annual average of 185,000 units if the industry could recover from a “short-term decline in manufacturing” due to COVID-19 and overcome the barriers of local zoning codes, more expensive and riskier chattel financing, and production backlogs. Expected impacts of COVID-19 include reduced manufacturer output due to the combination of staff shortages, social distancing requirements, and widespread supply chain disruptions for materials such as lumber, drywall, and fixtures; overall decline in demand for new homes; and as much as a 19 percent reduction in shipments relative to 2019. Predictions were primarily based on surveys of manufacturers and retailers conducted by Next Step Network, a nonprofit specializing in manufactured homes.