Actually, There Is Such a Thing as a Stupid Question…
“How much less does modular construction cost compared to conventional, site-built construction?”
There are at least 5 things wrong with that question. And knowing what’s wrong – and why – can help make any modular project be WAY more successful.
Apples versus oranges. A significant amount of modular construction involves relocatable buildings. Due to their temporary nature, the requirements for zoning, permitting, site construction, etc. are less rigorous. They’re naturally cheaper. Unfortunately, those numbers often get mixed into general discussions about off-site construction costs. With permanent modular construction, however, costs are much more in line with conventional construction. Remember, it’s not a different building. It’s just a different process for constructing that building. All the same design time, materials, labor, etc., go into it. Of course, there are still powerful economic advantages you get with off-site, modular construction. See #3, #4 and #5.
It’s not “either/or.” Permanent modular construction almost always includes site-built activity, too. Whether it’s the foundation, parking garage, utility hookups, landscaping, driveway or other infrastructure, there is going to be some type of construction work – with its attendant costs – taking place at the site. The secret for maximizing a modular project is to finish as much possible at the factory. That way, you eliminate or avoid more of the issues that can cause problems during site-built construction.
Cost certainty vs. cost overruns. 85% of owners report that their construction projects exceeded budget.1 The factors that drive cost overruns? Scope creep, weather delays, disruption to operations, labor shortages, security/safety challenges, etc. Off-site construction by its nature eliminates or minimizes all of these factors. As a result, you’re much more certain that the actual cost will conform to the estimate.
What is your time worth? One indisputable area of savings with off-site construction involves schedule. While 93% of the owners in a Dodge Data & Analytics survey2 reported that their projects exceeded schedule, a study sponsored in part by the National Institute of Building Sciences found 30%-50% schedule reductions3 with off-site projects. This is mainly due to the fact that off-site work can begin at the same time work at a site gets underway. What impact would that have on ROI if your retail store, restaurant or hotel could open months earlier? How beneficial would it be to daily operations at your emergency room, elementary school, or correctional facility if you could wrap up renovations weeks sooner?
Shorter risk window. Changing ownership, evolving brand standards, fluctuating finance rates, and other events can overtake projects quickly. The longer you’re “under construction,” the longer you’re exposed to the whims and vagaries of the market. Off-site construction reduces that exposure time and minimizes your risk.
Remember, not all off-site construction companies are created equal. As you think about costs, it pays to go beyond mere “conventional site built” vs. “modular construction” comparisons. Here’s one example: assembly-line approaches to custom modular construction might appear to be more economical at first. But when a bad fit at the site leads to costly and time-consuming mitigation, those “savings” quickly disappear and can even turn into losses. MODLOGIQ Smart Off-Site Construction method “builds together” at the factory. That means we construct up to 90% of the components exactly as they will be installed on site. The result is a precision fit and finish you can’t get with assembly line methods. And that ensures smooth, seamless installation and greater cost certainty.
Want to know more? Download our FREE Off-Site Construction Checklist. It provides valuable information, including 7 pre-construction strategies for building off-site using permanent modular construction.
3 Off-Site Studies: Permanent Modular Construction, Process, Practice, Performance (National Institute of Building Sciences, Integrated Technology in Architecture Center, University of Utah, Modular Building Institute)