CMC Industry Snapshot: Markets Served

Each year, The Modular Building Institute (MBI) prepares an annual report on the state of the industry. Data for this report was compiled from previously conducted quarterly reports collected and analyzed by Robert W. Baird & Co (Baird).

According to many industry participants, 2006 was a banner year for commercial modular construction. Many companies reported double digit revenue growth for the year, fueled by strong construction activity in the education, health care and government markets. Additionally, the market was (and continues to be) red-hot in certain geographic areas such as the western Provinces of Canada and surrounding areas, while traditional markets like California, Florida, Texas, and the Mid Atlantic United States remained solid. Following overall economic trends, the central region of United States continued to lag behind other areas.

However, the biggest trend that we recognized for the year was the increased interest and attraction of capital to the industry. Several companies entered into agreements with private equity firms while others acquired and/or merged with former competitors. As our industry's products and solutions continue to grow in market share and acceptance, we expect to see more interest from capital markets for the foreseeable future.

We at MBI remain optimistic about the future of this industry as evidenced by the results of our report. For example, dealers on average reported low double digit increases in revenues for the first and second quarters of 2007 compared to 12 months ago. Additionally, industry dealer utilization rate, defined as a measure of the percent of dealer fleet on lease compared to the total fleet, was at 82.30 percent at year end 2006.