Modular Construction Market

The global Modular Construction Market was valued at 2022 in 2022 and is projected to reach a value of 2030 by 2030 at a CAGR (Compound Annual Growth Rate) of 30.1% between 2023 and 2030.

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Modular Construction is a method of constructing structures in a factory setting before transporting them to the construction site and assembling them there. It entails pre-producing individual modules or sections in a controlled factory environment, transportation to the construction site, and on-site assembly to create the final product. Residential, commercial, healthcare, and educational buildings are just a few structures that can be built using the modules.

The global Modular Construction market has grown significantly in recent years, owing to various factors. The rising urbanization rate in many countries is one of the key drivers. The growing urban population has increased the demand for housing and other infrastructure, increasing construction activity. Modular Construction has several advantages over traditional construction methods, including reduced construction time and cost, improved quality control, and increased safety. The growing demand for affordable housing is another key driver of the Modular Construction market. Modular Construction methods have the potential to significantly reduce the cost of building affordable housing units, making them an appealing option for governments and developers looking to address the housing crisis.

Despite the numerous benefits of Modular Construction, some challenges and constraints must be addressed. One of the main difficulties is the lack of knowledge and comprehension of Modular Construction among architects, engineers, and other construction professionals. The lack of industry standards can also result in variations in the quality and effectiveness of various Modular Construction projects. The market for Modular Construction offers several opportunities for growth despite the challenges. The ongoing COVID-19 pandemic has accelerated using Modular Construction methods, providing a safer and more efficient way of building structures in a controlled environment.

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Furthermore, technological advancements such as 3D printing and Building Information Modeling (BIM) are expected to drive the Modular Construction market even further. These technologies can increase manufacturing efficiency and accuracy, reduce waste, improve sustainability, and enable greater customization and design flexibility. Several recent developments in the Modular Construction market have occurred in recent years. Skanska, a UK-based construction company, announced in 2020 that it would invest in a new modular manufacturing facility in the United States. The facility is projected to produce up to 4,000 housing units annually, contributing to the region's growing demand for affordable housing.

Economic Insights

The global Modular Construction market has grown significantly in recent years, driven by rising urbanization, increased demands for affordable housing, and the need for more efficient construction methods. Regarding the current economic situation, the COVID-19 pandemic has led to a period of global economic recovery. Due to the fiscal stimulus packages that many nations have implemented to support their economies, there is likely to be an increase in demand for construction projects, including Modular Construction. However, there are worries about inflation, which affects the price of building supplies and results in higher costs for Modular Construction projects. Recessions may also have an effect on the market for modular buildings. Modular Construction projects, in particular, may see a decline in demand during a recession. However, Modular Construction can provide some benefits during a recession, such as a shorter construction timeline and lower labor costs. As a result, during a recession, the market may be more resilient than traditional construction methods. Despite potential economic obstacles like inflation or a recession, the global market for Modular Construction is anticipated to expand overall in the upcoming years. The market is well-positioned to provide effective and affordable construction solutions. As the demand for affordable, sustainable housing rises, Modular Construction will likely play a bigger part in the construction sector.

Top Market Trends

1. Growing Demands for Sustainable & Eco-Friendly Construction Practices: As concerns about climate change and environmental impact grow, the global Modular Construction market is expected to increase demand for sustainable and eco-friendly building practices. This trend is expected to drive innovation and development of Modular Construction industry, focusing on green building materials and renewable energy sources. The market is driven by evolving government initiatives to reduce construction waste and promote green buildings. For example, the Singaporean government has mandated using PPVC (prefabricated, pre-finished, volumetric construction) elements in several government-owned projects. Moreover, the government provides subsidies to companies that standardize modern construction methods.

2. The Rise of Connected and Smart Modular Construction: IoT (Internet of Things) technology improves efficiency, safety, and functionality in smart and connected Modular Construction. This trend will continue as more Modular Construction companies incorporate IoT technology into their products and services in the coming years. In recent years, the Modular Construction market has seen a significant increase in investment as more businesses and investors recognize Modular Construction's potential as a growth industry. This trend will continue over the upcoming years, with more investment in the Modular Construction market.

3. Increasing Global Adoption of Lean Manufacturing Techniques: Today, Modular Construction is a prominent industry pursuing lean techniques to improve overall operational workflows. Permanent Modular Construction (PMC) provides sustainable construction by prefabricating single or multi-story buildings offsite. As a result, operational performance is enhanced, process improvement measures are found and evaluated, and the workflow for construction as a whole is enhanced. For instance, Skender's advanced manufacturing facility in Chicago introduced a modular production building in May 2019. Key market players worldwide embrace cutting-edge strategies like lean manufacturing and management, standardized project management (SPM), building information modeling (BIM), etc., to revolutionize the industry.

Market Segmentation

The global Modular Construction market can be categorized on the following: Type, Material, Module, End-Use Sector, and Region. Based on Type, the market can be categorized into Permanent and Relocatable. Moreover, based on the Material, the market can be split into Steel, Wood, and Concrete. Furthermore, based on Modules, the market can be divided into Four-Sided, Open-Sided, Partially Open-Sided, Mixed Modules & Floor Cassettes, Modules Supported by a Primary Structure, and Other Modules. In addition, based on the End-Use Sector, the market is segmented into Residential, Office, Education, Retail & Commercial, Hospitality, Healthcare, and Other Sectors. Likewise, based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on Type

Permanent Type to Lead with the Largest Market Share attributed to its Offering High-Quality Control in Comparison to On-Site Construction

The permanent segment will dominate the Modular Construction market over the forecasted period. Prefabricated building units are used in permanent Modular Construction to create buildings meant to remain in place permanently. Permanent Modular Construction (PMC) is an innovative and sustainable method that enables off-site manufacturing of prefabricated modules for use in single or multi-story buildings. Moreover, these modules can be integrated into an existing structure or built to stand alone. In addition, the rise in demand for customized and do-it-yourself construction significantly impacts market growth. Many competitors, architects, and builders use shipping containers to construct homes. For instance, Z Modular in the United Kingdom creates modular homes from repurposed shipping containers for multifamily and employee housing. The relocatable segment will have the highest CAGR during the forecast period. Relocatable Modular Construction entails using prefabricated building units to construct structures that can be relocated. Relocatable construction models are the best option for managing time and economic constraints when there is an immediate need for residential houses for a group of underprivileged people. Government initiatives and regulations promoting sustainability and a green environment are also expected to drive market growth during the forecast period. These mobile homes are also used to house people without housing and as temporary shelters for people affected by natural disasters such as hurricanes, earthquakes, and floods. These factors are driving significant growth in the market for re-locatable Modular Construction.

Based on the Material

Steel Accounts for the Largest Market Share as it Exhibits Excellent Mechanical and Chemical Properties

Steel will dominate the global Modular Construction market during the forecast period due to its wide use in shapes like H-type beams, columns, angles, I-beam shapes, and T-shapes. The material has outstanding mechanical and chemical properties, including high strength, durability, flexibility, ease of fabrication, seismic resistance, and fast erection speed. Steel Modular Construction is frequently used to construct schools & student housing structures. Steel buildings can also be constructed with four-sided modules, open-sided modules, special modules for stairs or lifts, and weightless modules. Steel Modular Construction is also suitable for residential developments, commercial, mixed retail, and city parking lots due to its strength and durability. These factors will provide market players with excellent opportunities to expand their businesses globally in the coming years. The wood material segment will grow with the fastest-growing CAGR during the forecast period. Wood Modular Construction is becoming popular in commercial buildings, city housing, and single-family detached homes due to its high compressive strength and resistance to bending. A key factor contributing to this market's growth is high-quality wood construction that is simple and quick to design. Furthermore, prefabricated wood products are more accurate in size than other materials, such as steel and concrete, which is a major reason for the market's rapid growth.

Based on Module

Four-sided Segment to Account for the Largest Market Share Owing to the Higher Efficiency of Modular Construction

The four-sided segment will dominate the global Modular Construction market throughout the forecast period. Four-sided modules are modular units assembled on-site to form a complete building. These modules have four sides, a floor, and a roof and can be used to build various residential, commercial, and industrial structures. The global Modular Construction market has grown significantly in recent years, and the four-sided module segment is expected to contribute to this growth. The open-sided segment will grow with the fastest-growing market CAGR during the forecast period. Open-sided modules are a particular kind of modular building unit that have one or more open sides. Typically, these modules build carports, pavilions, and outdoor seating areas that need natural ventilation.

Based on End-Use Sector

Residential Segment Accounts for the Largest Market Share due to the Increasing Investments in Residential Infrastructure

The residential segment will dominate the global Modular Construction market throughout the forecast period. Modular Construction can create visually attractive buildings prioritizing sustainability and aesthetics. It enables rapid construction, feasibility in terms of challenging designs, and the construction of unique and customizable homes that meet the needs of communities. Single-family homes, multi-story residential buildings, and rental housing properties are examples of residential applications. Modular Construction is gaining popularity in residential applications as it significantly reduces building costs and time. The growing number of migrants worldwide necessitating the construction of temporary and permanent housing structures is expected to boost demand for residential Modular Construction over the forecast period.

Based on Region

Europe to Lead Global Market Revenue Due to Increased Construction Projects across the Commercial Sector

The global Modular Construction market is expected to be dominated by the region of Europe in terms of growth and revenue. Europe has a sizeable Modular Construction market share in every industrial sector, including the market for Modular Construction, due to its reputation as the world's industrial center. The primary driving factor is likely to be the increasing influx of migrants, necessitating the development of temporary and permanent housing structures. Besides, factors such as multiple investments and the implementation of advanced technologies propel the Modular Construction market in Europe. Due to several factors, including population growth and housing shortages, Modular Construction is becoming increasingly popular in the United Kingdom as a viable way to build affordable homes.

The Asia Pacific is expected to grow fastest, with the highest CAGR during the forecast period. This is due to increased international investment in the region's infrastructure sector, supporting market growth. The use of Modular Construction is expanding, significantly boosting productivity growth due to growing environmental concerns and rising pollution rates. Modular Construction has gained traction in the region in recent years due to rapid economic development, rising labor costs, the quality and affordability of homes, technological innovations, and the promotion of national policies.

Competitive Landscape

The key players in the global Modular Construction market include - ATCO (Canada), Anderco Pte. Ltd. (Singapore), Giant Containers Inc. (Canada), Bechtel Corporation (U.S.), Lendlease Corporation (Australia), Skanska AB (Sweden), Speed House Group of Companies (UAE), Supertech Industries LLC (U.S.), Fluor Corporation (U.S.), Modulaire Group (UK) among others.

Recent Market Developments

· December 2022: Balfour Beatty signed an agreement to develop small modular nuclear reactors in the United Kingdom with Holtec Britain and Hyundai Engineering & Construction (HDEC).

· October 2022, Top Oasis Limited, a partnership between Sino Land Company Limited and CSI Properties Limited, will have contracted Balfour Beatty's 50:50 joint venture, Gammon, to build a housing estate in Yau Tong, Hong Kong, for HKD 1.3 billion (US $0.17 million).

· July 2021: Modulaire Group (formerly Algeco Group) has completed the acquisition of Procomm Site Services Ltd. (a UK-based portable, modular accommodation provider) to establish a strong Modular Construction market presence across Europe.

· August 2021: McGrath RentCorp announced the acquisition of Kitchens To Go, a leader in interim and permanent modular solutions for food service providers looking to continue or expand operations. The acquisition may enable McGrath RentCorp's Mobile Modular division to provide temporary and customized permanent food service facilities nationally.

Segmentation of the Global Modular Construction Market