Jul 5, 2021
COLLEGE STATION – Production of manufactured homes accelerated in June according to the latest Texas Manufactured Housing Survey (TMHS), contributing to increased business activity. Plant activity chipped away at backlogs that bottled up over the past year amid moderating sales volume.
'Backlogs started to ease for some manufacturers in June, but time will tell if that trend persists through July," said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association (TMHA). "Production days are reduced by Independence Day, and the summer sales season continues on retail lots."
Manufacturers expanded payrolls to boost activity, but hiring was hindered by on-going labor-supply challenges that drove wages and incentives upward. Survey respondents expect labor-market conditions to improve over the next six months.
In addition to hiring wages and salaries, rising prices for raw materials continued to drive up the cost of production. The TMHS corroborated inflationary pressures, but the rate of price increases slowed slightly.
"Manufacturers are experiencing some relief in lumber prices after a 40 percent decline in June," according to Dr. Harold Hunt, research economist at the Texas Real Estate Research Center at Texas A&M University. "Lumber prices, however, are still almost twice as high as they were last year."
Supply-chain disruptions continued to hinder operations and contributed to higher prices.
"Shortages in many other building components, especially those involving the use of chemical resins such as siding and shingles, are negatively impacting the construction process," said Hunt.
These challenges weighed on industry optimism, but the outlook for Texas’ manufactured housing industry remains favorable for the rest of the year.
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