Expansions expected in Texas’ manufactured housing industry despite supply-side challengesExpansions expected in Texas’ manufactured housing industry despite supply-side challengeshttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=259932021-06-01T05:00:00Z2021-06-01T16:00:00Z

​​COLLEGE STATION – The latest results from the Texas Manufactured Housing Survey (TMHS) indicate industry optimism that translated into capital investment and planned expansions.

"Manufacturers are bullish with retail demand remaining strong and purchasing from their community channels picking up in 2021," said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association (TMHA). "The TMHS showed production growth moderating, but after the past two months of home deliveries being off the charts, manufacturers may have found the ceiling for current capacity. Investments in automation and expanding headcount are expected."

Survey respondents noted a contracting labor supply that weighed on hiring activity, but these issues should subside over the summer and lead to increased payrolls.

Supply-chain disruptions, however, continue to inhibit industry activity with little improvement in sight. These upstream bottlenecks are contributing to constant inflationary pressures.

"Lumber prices have come down more than 20 percent below their peak three weeks ago," said Dr. Harold Hunt, research economist at the Texas Real Estate Research Center at Texas A&M University, "but prices are still more than two and a half times higher than a year ago. Manufacturers are seeing some relief, but still nothing to write home about."

Inflation in the input market has translated to higher sticker prices for manufactured homes, but it’s unclear how much more of the cost can be passed through to consumers.

In addition to rising costs, the industry noted increased uncertainty that is likely to persist over the next six months. Despite these obstacles, Texas’ manufactured housing industry is on track for solid annual growth in terms of overall activity and market expansion. ​

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