Prefabricated Wood Building Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 570 prefabricated wood building manufacturers in the US produce modular homes and commercial building units, log cabins, detached garages, sheds, sauna rooms, gazebos, wooden geodesic domes, and farm buildings such as barns, chicken coops and corn cribs. This industry does not include mobile home manufacturers, although some modular building manufactures also offer mobile homes and park models.

Variable Building Material Prices

Prefabricated wood building manufacturers rely on supplies of lumber, particle board, drywall, electrical wiring, plumbing fixtures, windows and doors, roofing and siding materials, insulation, flooring materials, cabinets, paint, and hardware.

Demand for Affordable Housing

Firms stand to benefit by working with land developers, lenders, and the government in creating affordable housing projects.

Industry size & Structure

A typical prefabricated wood building manufacturing firm operates out of a single location, employs fewer than 20 workers, and generates about $7-8 million annually.

    • The prefabricated wood building manufacturing industry consists of about 570 companies which employ about 19,000 workers and generate about $4.4 billion annually.
    • Just 50 firms have 100 or more workers.
    • The industry is somewhat concentrated: the 20 largest firms represent just 3.5% of the total number of firms but they control 59% of industry revenue.
    • Large companies include Skyline Champion (modular homes), Southland Log Homes, Backyard Products (sheds, gazebos), Country Carpenters (barns and sheds), and JDM Structures (barns and sheds).
                                  Industry Forecast
                                  Prefabricated Wood Building Manufacturers Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 28, 2022 - Ukraine War Further Disrupts Global Lumber Markets
                                  • Russia’s invasion of Ukraine is disrupting global wood product trade flows, especially in Europe. According to Wood Resources International, Russia, Belarus, and Ukraine exported 34 million tons of lumber in 2021, and 25% of that volume was exported to countries that have sanctioned Russia and Belarus. Europe’s timber imports from Russia and Belarus accounted for nearly 10% of the continent’s consumption in 2021. Wood certification organizations Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) have designated all timber from Russia and Belarus “conflict timber,” which cannot be used to manufacture certified products, including lumber and plywood. Even after peace returns to Europe, timber trade flows have likely been permanently altered.
                                  • On April 8, 2022, President Biden signed the Suspending Normal Trade Relations with Russia and Belarus Act which stripped the two countries of their “most favored nation” trade status. The move opens the path for significantly increased tariffs on imports of wood products from Russia, including plywood. In 2021, US imports of Russian veneer, plywood, and engineered wood products totaled $396 million, or a little over 3% of total imports. However, according to Forest Economic Advisors, Russia directly accounts for about 10% of all US hardwood plywood imports. By selling timber to major hardwood plywood producers such as Indonesia and Vietnam, Russia may indirectly supply another 10%. According to the Decorative Hardwoods Association, higher tariffs on Russian plywood imports are likely to benefit domestic producers.
                                  • Even before Russia invaded Ukraine, lumber markets were highly volatile. Lumber traded at $901 per thousand board feet on April 26, down from the record high of $1,670 per thousand board feet on May 7, 2021, but up from $454 per thousand board feet on September 15. Lumber prices have oscillated widely during the coronavirus pandemic, falling from the mid-$400s in January 2020 to $264 in late April before surging to $948 in September. The price then dropped to $495 in late October 2020 before starting a fairly steady climb to the record set on May 7, 2021.
                                  • Analysts at investment bank and financial services company Piper Sandler say that it is unlikely that more sawmills will be built to meet demand due to a lack of economic incentive to add capacity. Creating more sawmills is a capital-intensive process that also requires producers to get permits, and that can't be done quickly.
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