Global Modular Construction Market by Product (Relocatable and Permanent), Material (Wood, Steel, Concrete, and Others), Application (Residential, Commercial, Industrial, Healthcare, and Educational), and Region (North America, Europe, Asia-Pacific, and LAMEA): Opportunity Analysis and Industry Forecast, 2023-2032

Modular Construction Overview

Modular construction, commonly referred to as off-site construction or prefabrication, is a type of construction that entails producing parts or modules in a controlled factory setting rather than on-site. The building site is where these modules are subsequently brought and put together to create the final structure. In a factory-controlled setting, the building modules or components are created off-site in modular construction. Precision building methods, effective production, and quality control are all made possible by this controlled environment. Depending on the needs of the project, the modules are often built using a combination of steel, wood, concrete, or other building materials.

Global Modular Construction Market Analysis

The global modular construction market size was $92.4 billion in 2022 and is predicted to grow at a CAGR of 6.0%, by generating a revenue of $165.3 billion by 2032.

COVID-19 Impact on Global Modular Construction Market

During the COVID-19 pandemic, modular construction provided built-in benefits to people with its off-site production method. Besides, the controlled atmosphere of the factories enabled better adherence to health and safety regulations, including physical separation and hygienic practises. Compared to conventional on-site construction, this has helped lessen the pandemic’s impact on the construction activity.

The pandemic has brought to light the need for adaptable facilities that can easily change to meet evolving needs. The inherent flexibility and adaptability of modular construction makes it ideally suited to address this need. After the pandemic, there might be more interest in modular construction for projects that call for speedy deployment, space expansion, or reconfiguration.

Speed and Efficiency Offered by Modular Construction to Drive the Market Growth

The speed and efficiency it offers in comparison to conventional construction techniques is one of the main reasons for using modular construction. Modules can be manufactured concurrently while site preparation is taking place with the help of off-site manufacturing method. This shortens the building schedule and makes project completion quicker. When compared to traditional construction, modular construction might result in cost savings. The controlled production environment enables economies of scale, efficient material utilization, and minimized waste. Labor, site management, and project coordination costs are all reduced as a result of the streamlined manufacturing process and improved building methods. Compared to on-site construction, modular construction allows improved quality control. A controlled environment is used during the manufacturing process to guarantee standardized building techniques, precise engineering, and adherence to quality standards.

Limited Design Flexibility to Restrain Market Growth

Compared to conventional construction techniques, modular construction may have several drawbacks despite offering design flexibility. The modular units are pre-engineered and constructed off-site, which can limit the capacity to add highly customized features or make last-minute design adjustments. Transporting and assembling modules may impose restrictions on design. Transporting modules from the manufacturer to the construction site is a requirement for modular construction. Particularly for projects in rural places or regions with a lacklustre transportation infrastructure, the logistics of delivering big and heavy modules can be difficult. Important factors to consider include route planning, access to the building site, and co-ordination with transit suppliers.

Growing Demand for Affordable Housing to Drive Excellent Opportunities

The crisis in housing affordability around the world offers a large opportunity for modular construction. It is a good option for meeting the demand for cheap housing because of its efficiency, speed, and quality control. To satisfy the rising need for housing, modular construction can help to hasten the creation of affordable housing units. Schools, hospitals, office buildings, and retail establishments are just a few of the infrastructure development projects where modular construction can be quite useful. Modular units are an appealing solution for meeting the infrastructure demands in both urban and rural locations due to their flexibility to be quickly built and scaled.

Global Modular Construction Market Share, by Product, 2022

The permanent sub-segment accounted for the highest market share in 2022. Even for permanent structures, modular construction continues to provide advantages in terms of cost and time efficiency. The controlled factory environment enables more efficient resource use, less material waste, and simpler manufacturing procedures. In comparison to conventional methods, the construction process can be completed more quickly and at a lower cost. Green building practises and sustainability aims are well-aligned with modular construction. The off-site manufacturing process promotes improved resource efficiency, material recycling, and waste management. Modular architecture is a potential alternative for long-term green structures since it may combine sustainable materials and energy-saving measures.

Global Modular Construction Market Share, by Material, 2022

The steel sub-segment accounted for the highest market share in 2022. Steel is well known for having a high strength-to-weight ratio, which makes it a tough and long-lasting substance for modular construction. It has exceptional structural integrity, making it possible to build sturdy, long-lasting modular buildings that can endure a variety of weather conditions. Modular structure benefits from the strength and malleability of steel due to its inherent properties. A large variety of modular components can be easily produced and fashioned from steel, enabling a variety of architectural styles and permutations. It makes it possible to precisely assemble complicated and unique modular structures.

Global Modular Construction Market Share, by Application, 2022

The residential sub-segment accounted for the highest market size in 2022. The speed of building is one of the main factors for residential modular construction. When compared to conventional construction techniques, modular construction dramatically shortens construction schedules by enabling simultaneous off-site manufacture and on-site preparation. This speed advantage is especially enticing to developers and homeowners working on residential projects, since they want to see their projects finished more quickly. Construction of modular homes is significantly influenced by cost effectiveness. Materials may be used more effectively, waste is minimized, and economies of scale are possible in the controlled production setting. Modular construction is a desirable alternative for residential projects due to the streamlined manufacturing process and improved construction methods that reduce total costs.

Global Modular Construction Market Share, by Region, 2022

The Europe region accounted for the highest market share in the modular construction market in 2022. As an alternative to conventional construction techniques, modular construction is gaining popularity in Europe. Developers, contractors, and homeowners are using modular construction more frequently as a result of their awareness of its advantages in terms of speed, cost-effectiveness, and sustainability. Rapid urbanization in Europe’s metropolitan centres has raised demand for infrastructure and housing. By enabling quicker building schedules, affordable housing options, and effective use of constrained space in highly populated locations, modular construction offers an answer to this demand.

Competitive Scenario in the Global Modular Construction Market

Product development and geographic expansion are the common strategies followed by the major players functioning in the highly competitive global modular construction market. For instance, the largest homebuilder in Japan, Daiwa House, established a partnership with Capital Bay in October 2022 to provide modular construction throughout Europe. As a result of the JV, Capital Bay will use modular construction modules for its own projects and operator brands and will also make them available to other European clients.

Some of the leading modular construction market players are Sekisui House Ltd., Lendlease Corporation, LAING O'ROURKE, Skanska, Red Sea International, Premier Modular Limited, Bouygues Construction, KLEUSBERG GmbH & Co KG, DuBox, and Wernick Group