COLLEGE STATION – Production of manufactured homes in Texas increased in December, according to the latest Texas Manufactured Housing Survey (TMHS). Manufacturers unanimously pointed toward acceleration in the first half of 2021 as they attempt to whittle down backlogs and as supply-chain disruptions subside.
Despite the boost in production, general business activity was flat but should improve after the holiday season. The volume of new orders and sales recovered from dips in October and November. Manufacturers continued to invest in physical capital but expect this to level off in 2021.
"Most plants in Texas close for the week of Christmas, making December a low month for total number of homes shipped," according to Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association (TMHA). "But manufacturers’ daily floor production is increasing, and they continue shipping more multi-section homes with larger amounts of square footage."
On the employment front, payrolls expanded despite increased labor costs, but employee workweeks showed little change. The industry noted minimal movement in the labor supply and does not anticipate significant improvements in the near future.
In addition to rising labor costs, prices paid for raw materials surged after a reprieve in November. Prices received for finished homes moved similarly. Upstream inflationary pressure, however, may taper in 2021 amid recent lumber tariff reductions.
“With the continuing tightness in affordable site-built homes, the manufactured housing industry has reason to be upbeat about sales in 2021,” said Dr. Harold Hunt, research economist at the Texas Real Estate Research Center.
Respondents’ uncertainty regarding their company outlook calmed in December, but heightened levels are on the horizon. Despite this concern, Texas’ manufactured housing industry remained optimistic about overall activity and growth.
The Center and the TMHA have partnered to produce a monthly survey of business conditions and expectations surrounding the manufactured housing industry.
The Real Estate Center has a wealth of economic information online for free.