Rick Murdock, CEO and co-founder of Autovol, addressed the pressing need for innovation in the construction and housing industry. A forty-plus-year veteran of the construction sector, Murdock described unprecedented shortages in skilled labor and housing, calling for both conventional and modular companies to collaborate and innovate.
Focusing on ways to automate, standardize, and develop new materials, Murdock shared recent successes bringing together people, robots, and offsite and onsite methods.
Declining Construction Productivity
A central theme in Murdock’s presentation was the decline in construction productivity over multiple decades. According to McKinsey & Company, the construction sector has significantly lagged behind other industries in productivity improvements, primarily due to a lack of technological advancements and innovation in production methods.
Current Market Challenges
Despite rising interest rates, housing prices have remained stubbornly high, exacerbating the affordability crisis. Murdock pointed out a critical shortage in vacant housing and rental inventory, estimated to be 1.5 million below the normal level. These factors underscore the need for innovative solutions to increase housing supply and make homes more affordable.
The Need for Innovation
Murdock emphasized that the construction industry must learn to build more with fewer people and work smarter with the existing workforce. Highlighting a survey by Levelset, he noted that 66% of contractors spend over a quarter of their work hours waiting for other tasks to be completed, indicating significant inefficiencies.
Investing in Solutions
Murdock asserted that the potential for modular construction is immense, citing a McKinsey report suggesting that the market value for modular construction in Europe and the United States could reach $130 billion by 2030. Drawing parallels to the automotive industry, Murdock illustrated how innovations like assembly lines drastically reduced build times and increased efficiency, suggesting that the construction industry could achieve similar gains.
Advancements in Modular Construction
Murdock detailed the collaborative efforts of companies like The Pacific Companies, Autovol, Prefab Logic, and others in pioneering modular construction. Automation and robotics, he maintained, can significantly reduce costs, improve labor conditions, and speed up project completion. Murdock outlined notable achievements including cost savings of up to $100 per square foot in high-cost markets, a more diverse and satisfied workforce, and rapid project turnaround times – such as completing a 102-unit project in just four months.
Overcoming Barriers
Despite the promising outlook, Murdock outlined several obstacles, including a lack of education about modular construction, perceived risks, and regulatory constraints. He cited Cecilia Muñoz, former White House Domestic Policy Council Director, on how local regulations can stymie housing development and innovation:
“By allowing local rules that inhibit new housing development to accumulate, too many communities have limited their supply of housing over the last few decades in a way that undercuts economic mobility.”
Cecilia Muñoz, White House Domestic Policy Council Director
Moving into the Mainstream
Murdock contends that modular construction is moving toward mainstream acceptance. Innovations like “digital twins” and offsite construction – teaming up with onsite efforts – are proving their worth and signaling a bright future for the industry. He noted that recognition at industry events, such as the World of Modular Awards, underscores the success of collaborative modular projects and the critical role of innovation.
By leveraging modular construction and technology, Murdock affirmed that the housing industry can overcome current challenges, meet the growing demand for affordable housing, and create a more efficient, productive, and diverse workforce.
Please visit the Autovol website for more information and to view current and past construction projects.