My Latest Survey: What 2024 Revealed About Offsite Construction’s “Resilience”

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Offsite construction is often lumped into one convenient category, but as anyone in the industry knows, it’s a vast and varied landscape. Modular factories are a cornerstone of offsite, yet not all offsite factories are modular. This distinction becomes crucial when examining the health of the industry. Modular factories rely on precise, repeatable processes, while broader offsite facilities may focus on components, panels, or hybrid solutions that blend traditional and modern construction methods.

Curious about how this diversity played out in 2024—a year of economic challenges, shifting regulations, and technological growth—I turned to my newsletter subscribers. The results were eye-opening. Their responses paint a vivid picture of resilience, struggles, and unexpected successes.

The Numbers: A Snapshot of 2024

In a survey to my subscribers, I asked a straightforward question: How did your offsite factory perform in 2024? The responses were as follows:

Closed the doors forever – 28.8%
Met our primary goals – 22.7%
Exceeded expectations – 21.2%
Had a small profit – 18.2%
Lost money – 9.1%

While nearly one-third of offsite factories reported permanent closures, over 60% achieved some level of financial or operational success. These numbers highlight the polarized nature of the industry, with winners, survivors, and casualties all sharing the same turbulent market.

Closures: What Went Wrong?

The staggering 28.8% of factories that shut down offers a sobering reminder of offsite construction’s challenges. Many of these closures were small startups that failed to gain traction in competitive markets or older facilities unable to adapt to new demands. The reasons varied:

Financial Overreach
Ambition is often the Achilles’ heel for new offsite factories. Overcommitting to high-tech automation, robotics, or software without a clear ROI plan has led to financial collapse for many. In 2024, venture capital funding slowed, leaving some factories stranded without the resources to sustain operations.

Labor Shortages
Skilled labor remains a persistent problem. Factories relying on workers with specialized training in modular or panelized systems struggled to keep up with production schedules, leading to lost contracts and client dissatisfaction.

Regulatory Challenges
From local building codes to state-level compliance issues, many factories found themselves bogged down by regulations. Delays in approvals and inspections often tipped struggling factories over the edge.

Supply Chain Disruptions
Although supply chains stabilized somewhat in 2024, certain materials—especially steel and specialized laminates—remained costly or hard to procure. These delays made meeting deadlines and budgets nearly impossible for some factories.

Success Stories: What Worked?

On the brighter side, nearly 40% of respondents either met or exceeded their goals in 2024. These factories offer valuable lessons for the industry as a whole.

Specialization and Niche Markets
Factories that carved out a niche—whether it was producing ADUs, luxury modular homes, or eco-friendly components—saw strong demand. One respondent noted, “Focusing on sustainable materials gave us a competitive edge with clients looking for green building solutions.”

Operational Efficiency
Streamlining production lines, integrating AI-driven predictive maintenance, and embracing lean manufacturing techniques allowed some factories to cut costs without sacrificing quality. Efficiency became a key differentiator.

Strategic Partnerships
Collaboration proved essential in 2024. Successful factories partnered with developers, architects, and financial institutions to secure steady project pipelines and minimize risk.

Technology Adoption
Factories that invested in Building Information Modeling (BIM) and IoT solutions improved coordination and reduced errors. One respondent shared, “The upfront cost of new software was intimidating, but the efficiency gains paid off by mid-year.”

The “Middle Ground” Factories: Small Profits and Losses

Factories reporting small profits (18.2%) or losses (9.1%) reflect the balancing act many operators faced in 2024. These factories often navigated a mix of wins and setbacks:

Revenue Stability vs. Cost Control
Some factories managed to secure contracts but faced thin margins due to rising costs. Inflation, particularly in wages and utilities, ate into profits.

Learning Curves
For newer factories, 2024 was a year of growing pains. Even those that lost money gained valuable insights into streamlining processes and understanding market demands.

Missed Opportunities
Factories operating in competitive markets sometimes hesitated to adopt innovations like modular robotics or hybrid component systems. This cautious approach limited growth.

Modular Factories vs. Non-Modular Offsite Facilities

The survey also highlighted key differences between modular factories and other offsite facilities. Modular operations, known for their precision and repeatability, fared better overall than panelized or hybrid factories. Modular’s ability to deliver turnkey solutions for housing and commercial projects gave it an edge in a market hungry for speed and reliability.

Non-modular facilities, while versatile, often struggled to position themselves as indispensable. A factory producing wall panels or roof trusses, for instance, depends heavily on partnerships with developers or modular builders to thrive. Without strong relationships, these factories risked being overlooked in favor of vertically integrated solutions.

Lessons for 2025 and Beyond

As 2024 comes to a close, what can offsite construction factories take away from this year’s mixed bag of outcomes?

Flexibility is Crucial
Factories must adapt to changing market demands. Whether it’s embracing new materials, adjusting production scales, or pivoting to new market segments, flexibility will be key.

Innovation Must Be Balanced
While innovation drives progress, factories should carefully assess the ROI of adopting cutting-edge technologies. Not every factory needs robotics, but every factory needs a plan for growth.

The Power of Partnerships
Building strong networks with developers, architects, and local governments can help factories weather economic downturns. Collaboration is no longer optional—it’s a survival strategy.

Employee Investment Pays Off
Training programs for workers can mitigate the skilled labor shortage and improve morale. Factories that treat employees as assets rather than costs tend to see long-term benefits.

Modcoach Note

2024 was a revealing year for offsite construction. The stark divide between thriving factories and those that shuttered underscores the challenges and opportunities in this industry. Modular factories, with their repeatable processes and integrated solutions, continue to lead the charge, but the broader offsite sector must find ways to keep up.

As we look to 2025, the lessons of the past year should guide the industry forward. Success won’t come from doing what’s always been done. Instead, it will emerge from innovation tempered by strategy, partnerships built on trust, and a commitment to excellence at every level of the factory floor.

If your offsite factory survived 2024, congratulations—you’ve proven your resilience in a tough market. If you thrived, share your story. And if you didn’t, remember: failure in offsite construction isn’t the end. It’s often just the beginning of your next chapter.