Identifying Opportunities for Engineered Lumber Products in the Modular Housing Industry

Modular housing is an important segment of the factory-built housing industry, in the Mid-Atlantic. In 1998, a study was conducted to assess the structural needs and requirements of this industry. This study addressed three questions. (1) What is the current and future state of the industry? (2) What structural material trends are present between 1992 - 2000? (3) What opportunities exist for product substitution and development of new structural materials?

This study found that the modular housing industry in the Mid-Atlantic region is growing. The greatest barrier to market expansion is transportation costs. Expansion is expected in the South and Midwest regions of the US. Most competition comes from site-built and manufactured homebuilders. To stay competitive, respondents plan to increase customization options and home size.

The need for cost effective, quality structural materials is a growing concern. Softwood dimensional lumber has been decreasing since 1992 and is expected continue to decrease through 2000. Decreases are due to design changes and quality concerns. The use of engineered lumber has increased in order to compensate for decreases in dimensional lumber necessary to meet the structural needs of the industry.

Using factor analysis and perceptual mapping techniques, dimensional lumber was not perceived to be as suited for structural building applications as engineered lumber. However, respondents felt that engineered lumber tended to be more expensive. Perceptual mapping also identified gaps between the ideal needs of building applications and the ability of current materials to meet those needs. Opportunities for new product development exist where gaps occurred.