refuse – to design and build for them
at a lower cost with higher quality,
and to do it faster.”
“What if the builder could elimi-
nate the need for designers, estima-
tors, installation labor, and materials
sourcing,” he writes. “Just like Nike
or Apple, builders will become
brands who don’t need to actually
make anything themselves.”
Mitchell suggests the integrated,
technology-based modular construc-
tion process will uproot the tradi-
tional new construction market with
these changes:
The builder, Katerra, will be order-
ing truckloads of products to be de-
livered to their factories. No more
need for distributors, dealers or con-
tractors; • Labor shortages and installation
errors will be a thing of the past;
• The builder will be taken out of
the equation when it comes to
product sourcing. There will be no
more rebates. Katerra will want
the best bottom line price, period;
and • Katerra will be able to look at mak-
ing really big changes in how
homes and buildings are built. Be-
cause of their scale and process,
it will be easy for Katerra to con-
sider big changes like changing to
metal framing in residential con-
struction. Mitchell predicts Katerra’s industry
changes will happen fast. “And just
like the taxi industry, the National As-
12 – WINTER 2018 — Florida Construction News
sociation of Home Builders (NAHB)
and some builders may try to push
back with legislation that may slow
but won’t stop this change,” he
writes. Writing to building products man-
ufactures, Mitchell says: “In two to
three years, or sooner, you will feel
the effects of this change as your
larger builders will no longer be buy-
ing from you. It will also happen to
you in the commercial area.”
Mitchell also predicts there will be
some high level competition to
Katerra, just as Lyft competes with
Uber. “Look for people like Elon
Musk or others to create new com-
panies designed to compete with
Katerra.” Katerra and other high-level inte-
grated technology/modular builders
will gain traction in part because of
an increasing number of successful
completed projects, coupled with
pressures on labor supply caused in
part by increasing immigration re-
strictions in the U.S., says another
consultant. “In 2018, I believe we will see a
perfect storm of factors – an aging
global workforce, a lack of new en-
trants and growing restrictions on
free movement of labor - begin to
decisively accelerate the uptake of
construction integrated manufactur-
ing,” writes Kenny Ingram, global in-
dustry director at IFS, a software
developer. “Government, regulatory bodies
and the industry alike will start to re-
alize that, while getting more people
into the industry is important, as well
as trying to increase the number of
people onsite, the most strategic so-
lution would be to fundamentally
change the way we build in the first
place.” “New technology is making it eas-
ier to work profitably on a global
level as well,” he writes. “With 3D
printing, for example, costs for both
material and long transports are de-
creasing substantially. Using tech-
nologies such as these, the
partnerships will focus more on
global competence exchange rather
than long-haul transports.”
“All three of these trends are
woven tight together. Contractors
need to work hard to ensure that the
right competences are secured while
considering how to implement new
business models for modular build-
ings and construction integrated
manufacturing — all this in a con-
struction industry that is becoming
more global and offers new forms of
partnerships. The players who mas-
ter this balancing act will be the win-
ners in 2018.”
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