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 Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation 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

                                  Recent Developments

                                  Nov 7, 2022 - Single-Family Home Sales Drop
                                  • New single-family home sales, a demand driver for some types of prefab wood buildings, decreased 10.9% month over month and declined 17.6% year over year in September 2022, according to the US Department of Commerce. On a year-to-date basis, new home sales were down 14.3% in the first nine months of 2022 compared to the same period in 2021. According to Freddie Mac, on November 3, 2022, the US weekly average rate on a 30-year fixed mortgage was 6.95%. A year ago, the rate was just over 3%. Industry watchers expect new home sales to remain weak as the Fed uses interest rate hikes to bring down inflation.
                                  • The pandemic’s effect on construction labor and building materials availability is helping to spur demand for prefabricated modular homes, according to Barron’s. Industry insiders say business is gaining steam as modular homes gradually shrug off the perception that prefab housing is high-volume and low-quality. Makers of luxury modular homes suggest the faster build schedules attract affluent buyers. Many builders of custom site-built homes have long backlogs due to labor and supply constraints. Modular homes are also gaining popularity in regions such as the Rocky Mountains, where the combination of remoteness and weather can add years onto the building schedule for site-built homes.
                                  • Non-site built single-family homes, including modular and panelized, accounted for 2% of US single-family completions in 2021, according to a September 2022 report by the National Association of Home Builders (NAHB). Non-site built homes’ share of the overall single-family housing market has been in decline since the early-2000, despite steady interest in such homes. Despite its small share of the overall single-family market, the NAHB says the modular and panel home market holds opportunity for expansion.
                                  • At the end of 2021, the $2,000 45L Energy Efficient Home Credit for home builders, including builders of manufactured homes, expired but has been renewed and extended under the Inflation Reduction Act (IRA), which President Biden signed into law in August 2022. Under the new law, new single-family, multifamily, and manufactured homes sold or leased in 2022 will be eligible for the $2,000 2021 energy efficiency standard tax credit. However, beginning in 2023 and running until the end of 2032, manufactured homes that meet new energy-efficiency provisions and requirements set by the Manufactured Homes Program will qualify for a $2,500 tax credit. Prefabricated homes that have earned an Energy Star rating through the Department of Energy may be eligible for the credit through the Manufactured Homes Program.
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