COLLEGE STATION – The latest Texas Manufactured Housing Survey reveals an uptick in industry optimism regarding the second half of 2021. Manufacturers are investing in capital expenditures and expanding payrolls in hopes of boosting production, but supply-chain disruptions remain a hindrance.
According to Dr. Harold Hunt, research economist with the Texas Real Estate Research Center at Texas A&M University, “Although supply-chain bottlenecks continue, port and railroad executives predict significant improvement in material flows six to nine months from now.”
Prices paid for raw materials decelerated for the second consecutive month, and survey respondents anticipate price declines as the supply chain smooths. Inflationary pressure also decreased on the retail front after prices for finished homes mirrored material-cost fluctuations.
Manufactured-housing sales decreased for the third straight month, but production continued at a rapid clip amid backlog buildup over the past year.
“Strong retail-sales data suggest declining sales from manufacturers has more to do with the market normalizing from the pandemic production squeeze than from some larger slowdown in demand,” said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association. “Texas manufacturers had been receiving orders from states much farther than normal. As producers in other states catch up, spec orders and demand from out-of-region buyers have probably cooled too.”
Regulatory changes presented another challenge to Texas’ manufactured housing industry, but uncertainty decreased overall, and activity is expected to accelerate to close the year.
The Texas Real Estate Research Center has a wealth of economic information online for free.