US shipments of prefabricated housing, which includes manufactured housing (single-section and multisection), and modular, precut and panelized housing, are forecast to increase 1.7 percent annually through 2007 to 285,000 units, valued at $11.8 billion. This represents a modest recovery from the decline experienced during the 1997-2002 period, which mainly resulted from a sharp decrease in the manufactured housing segment. Growth for prefabricated housing will be supported by the cost advantages of factory production, such as bulk material purchasing and insulation from weather-related delays. Innovations in style and design that allow prefabricated houses, particularly modular homes, to more closely resemble site-built houses will also aid gains. These and other trends are presented in Prefabricated Housing, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm. Shipments of manufactured housing, which accounted for almost 65 percent of total prefabricated housing shipments in 2002, are projected to rise 2.4 percent per annum through 2007 to 190,000 units. This is a vast improvement over the 1997-2002 period, during which manufactured housing shipments contracted almost 14 percent annually. Multisection units will drive growth, rising at a forecast pace of 2.6 percent per year through 2007 to 148,000 units. Shipments of other prefabricated housing (modular, precut and panelized) are forecast to remain nearly flat at 95,000 units in 2007 This pace reflects a weak US housing market, with starts contracting over the forecast period, although from a relatively high base. While total shipments will remain low, market penetration for other prefabricated housing will experience a slight increase at the expense of conventional, site-built housing. The South will continue to account for the bulk of prefabricated housing demand, benefiting from slightly above average population and economic growth, and population inmigration through 2007. In addition, the affordability of prefabricated housing and the more positive consumer perceptions of manufactured housing in the South will aid growth.

US PREFABRICATED HOUSING SHIPMENTS (thousand units)

% Annual Growth
Item	1997	2002	2007	02/97	07/02
Prefabricated Housing Shipments	439	262	285	-9.8	1.7
Manufactured Housing	354	169	190	-13.7	2.4
Other Prefabricated Housing	85	93	95	1.8	0.4
Prefabricated Housing (million dollars)	11795	9475	11840	-4.3	4.6

©2003 by The Freedonia Group, Inc.