May 2024

2024 Labor Productivity Study Part 2: Prefabrication

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Labor productivity is the central economic engine that drives profitability for labor-intensive, self-performing contractors. FMI’s 2023 Labor Productivity Study found that contractors experienced approximately $30 billion to $40 billion in lost profits due to labor inefficiencies in 2022.

When talking about field labor productivity and producing more output with less input, the concepts of off-site construction and prefabrication are invariably part of the conversation. In our research, we sought to understand how labor-intensive firms are incorporating these industrialized construction concepts into their business models to address internal and external challenges impacting labor productivity.

Key findings include:

  • 78% of those surveyed saw schedule savings using prefabrication.
  • 66% found cost savings with prefabrication.
  • 16% of craft labor hours are currently spent in prefabrication and that is expected to increase to 34% in five years.

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