Thursday, February 26, 2015

Save Yourself $4,950...Don't Buy the Latest "Prefabricated Housing" Report

I just received the PR release for the latest report on Prefabricated Housing by Global Industry Analysts, Inc and after reading the promo piece that is supposed to entice me into paying $4,950, I did not buy nor will I. I wouldn't mind reading someone else's copy though.

With the indifference most real modular home factories have about marketing and demographics I think that any factory that buys it will have it setting on the shelf within a couple of hours of purchasing it. Even if some factory management teams do begin working on a plan based on this report it will fail in most cases. I can name on two fingers the number of modular factories that will probably use this info to further their business.

Here is their PR Release along with my comments in RED:

Growing Consumer Preference for Modular Homes Drives the Prefabricated Housing Market, According to a New Report by Global Industry Analysts, Inc.

GIA announces the release of a comprehensive report on the US Prefabricated Housing market. Shipments of Prefabricated Housing in the United States are projected to reach 133 thousand units by 2020, driven by the strong demand for eco-friendly and energy-efficient modular homes. It is not modular homes driving this. Of the 133,000 units mentioned only 23-25, 000 were true modular homes. 
With governments worldwide focused on addressing issues related to the supply of affordable housing, demand for prefabricated housing is expected to witness healthy growth. Adequate, affordable and quality homes are building blocks for the creation of strong and stable communities.
Adoption of comprehensive community development strategies is benefiting prefabrication technologies which allow houses to be built quickly and cost effectively. The need for affordable housing additionally attracts increased attention in the present economic climate where consumers are wary of spending heavily on site-built homes. Prefabricated homes come at a price which is about 20 percent lesser than traditional homes built on-site. Where are they getting this cost savings? From the single and double wide people, that's where.
Manufactured, modular, panelized, and precut homes are major types of prefab housing solutions available in the United States. Manufactured housing represents the largest market segment accounting for the bulk of shipments. While manufactured homes are built according to HUD building Code, modular, panelized, and precut homes are built as per the state and local building regulations. 
Prefabricated housing market is mature in the United States and is driven by favorable federal housing policies and national level efforts to improve housing conditions. Key factors driving growth of modular homes include monetary, legal, and taxation benefits on par with onsite-built homes, and growing environmental awareness and regulatory pressures which are encouraging interest in eco-friendly and energy-efficient homes. The number of modular homes sold into many states is actually dropping BECAUSE of discrimination against real modular housing by National and State code enforcement and unnecessary regulations imposed solely on modular housing.
Other advantages offered by factory built homes include better quality and durability as building processes carried out in controlled environments; reduced raw material wastages; and economies of scale in purchasing building materials and components. Given their huge order quantities, manufacturers of prefabricated housing have higher bargaining power with material suppliers. The production cost benefits achieved in manufacturing factory built homes are passed on to the final customer, making prefab houses cheaper and affordable. Maybe the double wide HUD factories can pass on savings to the end customer but not so with real modular housing. Modular home builders now compete directly, dollar for dollar, with site builders. The two biggest benefits of going with a real modular home are time to occupancy and better construction methods.  
As stated by the new market research report, prefabricated housing is re-emerging as a one-stop solution for affordable, eco-friendly housing in the United States, after years of sluggish growth. Single-Section Manufactured Housing is expected to witness the highest growth at a projected CAGR of 5.4% over the analysis period. Real modular home production has risen but not its' market share. A rising tide lifts all ships. 
Leading players covered in the report include American Ingenuity Inc., American Homestar Corporation, Cavco Industries Inc., Palm Harbor Homes, Champion Home Builders Inc., Clayton Homes Inc., Commodore Corp., Deltec Homes Inc., Endeavor Homes, Gastineau Log Homes, Innovative Building Systems Inc., All American Group LLC, Excel Homes Group LLC, Lindal Cedar Homes Inc., Muncy Homes Inc., New Panel Homes Inc., Pacific Modern Homes Inc., Pleasant Valley Homes Inc., Professional Building Systems Inc., Ritz-Craft Corporation Inc., Signature Building Systems Inc., Skyline Homes, Southland Log Homes, and Wisconsin Log Homes Inc., among others. Only the companies in GREEN are real modular factories and even a couple of them build HUD housing.
The research report titled “Prefabricated Housing: A US Market Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of the value chain, product and market trends as well as challenges, growth drivers, competitive scenario, and regulations in the US prefab housing market. The report provides market estimates and forecasts of unit shipments of prefabricated houses in the US market across major product segments, such as, Manufactured Housing (Single-Section and Multi-Section), Modular Housing, Precut Housing and Panelized Housing.

Here is the cost sheet if you are interested in purchasing it. I'm sure Cavco, Champion and Clayton will buy it but if you are a real modular home factory owner, please go together with the other factories and buy one copy, look at the pretty charts and graphs for a day and pass it on the next factory. 

GIA Report on Manufactured Housing

2 comments: said...

Upon reading this I had the same feelings as you, but maybe a bit stronger. I was wondering if this was the successor company to the one based in Ohio that offered a very similar product for a hefty price. But when reading about them nothing disclosed if they used to operate under a different name.

I was amazed to read only 28% of their research is USA. But then I read where they boast of having almost 10,000 clientele worldwide.

Bottom line is if I was owner of a modular operation i don't see where all this research would help me to expand my market. But, I do see a definite need for this type reports for USA based factory builders. Much like what Automated Builder used to publish annually and giving data for panelized, modular, HUD Code, components and balancing it in agreement with annual numbers published by Zcommerce Department.

In doing feasibility studies for clients I would love a good source, but i don't think this one would perform that function.

As a publisher I would think they would give you a comp copy hoping for a positive review saying "buy this - it us worth the cost" vs your negative post.

Josh Margulies said...

I dont know coach. It is a tool for a well heeled entity to be sure. And i dont know em either. I got a nephew in the market research business. The kid is no schmuck. The amount of info to which we all have access to is incredibley vast. No one guy can internalize it. And - given all that are their costs too high? Dont know.

I would agree that this goes on a global minded shelf and, hopefully picked up occasionally. But can we (real small modular builders) benefit by access to some part of the report? Did the MBI input into it? Can the MHBA get a piece of it for members. Can we get an RSM to sneak a copy. Why are they out of Ireland? Who r these guys!?

This is the information age. And i wish i could figure out what i need to know and where i could find good, reliable, intelligence about the most important industry to any civilized national economy (my own state would be a good start).