Modular Construction Market
Modular Construction Market Size, Share & Industry Analysis, By Type (Permanent, Relocatable), By Material (Steel, Concrete, Wood, Others), By End-User (Residential, Commercial, Industrial, Healthcare, Education), By Region (North America, Europe, Asia-Pacific, Latin America, Middle East & Africa) - Share, Size, Outlook, and Opportunity Analysis, 2024-2031.
Market Overview:
“The global Modular Construction market is projected to grow at a CAGR of XX% from 2024 to 2031, with the market value expected to rise from USD XX billion in 2024 to USD YY billion by 2031.”
The Asia-Pacific region is poised to dominate the market, driven by rapid urbanization, increasing housing demand, and government initiatives promoting sustainable construction. Key metrics include rising adoption in commercial and industrial sectors, growing focus on reducing construction time and costs, and increasing investments in prefabrication technologies.
Modular Construction Market Dynamics:
Market Trend: Integration of advanced technologies enhances efficiency and customization in modular construction
The modular construction market is experiencing a substantial trend towards the integration of new technology, which is transforming the way structures are designed, manufactured, and erected. This movement is motivated by the demand for higher efficiency, customisation, and quality control in the construction industry. Building Information Modelling (BIM), 3D printing, and robotics are increasingly being used in modular construction procedures. BIM enables the accurate planning and visualisation of modular pieces prior to manufacturing, eliminating errors and enhancing cooperation.
3D printing is being used to create complicated components and custom designs, opening up new avenues for architectural innovation. Manufacturing facilities are using robotics and automation to improve module production precision and speed. This trend is especially prevalent in developed countries such as North America and Europe, where there is an increasing emphasis on smart buildings and sustainable development. The use of these technologies not only improves the quality and consistency of modular buildings, but it also helps to reduce waste and shorten project schedules.
Market Driver: Increasing demand for fast and sustainable construction solutions drives modular market growth
The increased desire for quick and sustainable construction solutions is a major driver of the modular construction market. As urbanisation accelerates and housing shortages continue in many areas, the demand for quick and efficient construction methods has grown. Modular building saves significant time as compared to traditional construction methods, with projects typically completed 30-50% faster. This speed is especially important in industries such as healthcare, education, and affordable housing, where new facilities are urgently required. For example, during the COVID-19 pandemic, modular construction was widely employed to quickly deploy healthcare facilities, with some hospitals built in as little as two weeks.
Furthermore, the sustainability component of modular building is consistent with growing environmental concerns. Modular buildings often produce less waste, utilise fewer resources, and have a lower carbon footprint than traditional construction. A recent industry analysis found that modular building can save construction waste by up to 90% when compared to site-built projects. These factors work together to increase the usage of modular construction techniques in a variety of industries, hence driving market growth.
Market Restraint: Perception issues and transportation limitations challenge market expansion
The modular building sector is constrained by perception difficulties and logistical challenges associated with transportation. Despite technological and quality breakthroughs, some customers and industry professionals continue to believe that modular structures are of inferior quality or less lasting than traditional buildings. This perception can cause caution in using modular construction technologies, especially for high-end or landmark projects. According to a 2023 poll, 35% of potential commercial clients still connect modular construction with transient or low-quality structures, which has an influence on industry growth.
Furthermore, transportation constraints present a substantial barrier to the spread of modular construction. The size and weight of prefabricated modules are frequently restricted by road rules and transportation infrastructure, restricting design options and the distance modules can be carried economically. Because of highway laws, module sizes in many places are limited to a maximum of 16 feet in width and 60 feet in length. These limits can have an impact on project feasibility, particularly in remote places or large-scale developments, thereby increasing costs and lowering the benefits of off-site construction.
Segment Overview:
The Commercial segment is expected to dominate the Modular Construction market during the forecast period.
The Commercial category is expected to maintain its lead in the modular construction market as prefabricated solutions become more popular in industries such as offices, retail, hotel, and healthcare. The necessity for rapid deployment of commercial spaces, cost-effectiveness, and the ability to develop flexible, adaptable buildings all contribute to the segment's growth. The business sector has been especially open to modular building's advantages, including shorter construction times, less site disruption, and better quality control.
According to our research analysis, the commercial modular building business has grown at a compound annual rate of 6.8% over the last five years, far outperforming traditional construction methods. This development is especially noticeable in the office and hospitality sub-sectors. For example, in 2023, a large hotel chain announced plans to build 50% of its new facilities with modular construction methods over the next three years, estimating a 30% decrease in construction time and a 20% cost savings over traditional methods.
The healthcare sub-sector of commercial modular building has experienced tremendous expansion, particularly in the aftermath of the COVID-19 epidemic. In 2022, modular construction was employed to deliver nearly 3,000 hospital beds across North America in response to the healthcare crisis, showcasing the sector's ability to respond quickly to critical infrastructure demands. This achievement has sparked growing interest among healthcare providers in employing modular construction for future expansions and renovations.
Furthermore, the surge in flexible workspace concepts has increased demand for modular office solutions. According to a 2023 study of commercial real estate developers, 65% intend to use modular construction into their office buildings during the next five years, citing the necessity for adaptable facilities that can be quickly altered to meet changing tenant needs.
Regional Outlook:
Asia-Pacific is expected to dominate the Modular Construction market during the forecast period.
The Asia-Pacific region is expected to maintain its leading position in the global modular construction market, owing to growing urbanisation, significant infrastructure investments, and government initiatives promoting sustainable and efficient construction methods. Countries such as China, Japan, and Singapore are leading the way in modular construction adoption, adopting this technology to alleviate housing shortages and urban development difficulties.
In recent news, China declared a statewide strategy to boost the share of prefabricated buildings to 30% of new construction by 2026, indicating a significant government push for modular construction. This program is expected to dramatically increase the market in the region. The modular construction market in Asia-Pacific is expected to develop at a 7.5% CAGR between 2024 and 2031, surpassing other regions. Japan is the leader in technology adoption, with modular methods used in over 15% of new residential projects, the highest rate in the world.
Singapore's recent improvements have also helped the area maintain its market leadership. The Singapore Building and Construction Authority (BCA) has mandated the use of Prefabricated Prefinished Volumetric Construction (PPVC) for certain residential government land sale sites, promoting innovation and uptake in the industry. This legislation has led to a 30% growth in modular construction projects in the country during the last two years.
Competitive Intelligence:
The global modular construction industry is dominated by a mix of existing businesses and innovative new entrants, with competition increasing as the market grows. To sustain their competitive advantage, key corporations are investing in technical developments, strategic collaborations, and geographical growth.
Market leaders such as Skanska AB and Laing O'Rourke have maintained their dominance through broad service offerings and robust project portfolios. These companies account for approximately 30% of the global market share. Skanska AB, for example, projected a 25% year-over-year rise in modular construction division income in 2023, owing mostly to its unique "flying factory" idea for on-site module manufacture.
Emerging firms such as Katerra and ATCO are rapidly expanding their market share through novel business models and superior manufacturing techniques. Before its restructuring in 2021, Katerra had acquired projects worth more than $4 billion, demonstrating the potential for disruptive entries into the sector.
Recent industry consolidations have changed the competitive landscape. In 2022, a major merger between two prominent modular construction providers resulted in the formation of a new business with a combined market share of around 15%, challenging the status of established players.
Looking ahead, the market is projected to become more competitive in providing sustainable and energy-efficient modular solutions. Companies are also expected to focus on improving their digital skills, such as using AI and machine learning in design and manufacturing processes, in order to acquire a competitive edge.
Analyst Opinion:
The modular construction industry is expanding rapidly, owing to the growing need for fast, cost-effective, and sustainable building solutions. The integration of modern technologies such as AI, IoT, and robotics into modular manufacturing processes is a significant trend to watch, as it has the potential to revolutionize the industry by increasing customisation capabilities and production efficiency.
The market is expected to see an increase in R&D initiatives aimed at discovering new materials and design processes that will improve the quality and performance of modular buildings. To fully realize the market's potential, industry players must address hurdles such as perception issues and transportation limits. The Asia-Pacific region, particularly China and Singapore, will continue to be the market's development engine, creating lucrative prospects for both current players and new entrants. The industry's focus on sustainability, as well as the growing acceptance of modular technologies in the commercial and healthcare sectors, are projected to promote long-term growth.
Major Players:
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Skanska AB
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Laing O'Rourke
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Katerra
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ATCO
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Algeco Scotsman
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Red Sea Housing
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CIMC Modular Building Systems Holding
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Bouygues Construction
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VINCI Construction
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Lendlease Corporation
Key Developments:
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September 2023: Skanska AB announced the opening of a new modular construction factory in Poland capable of producing up to 3,500 modules per year, thereby boosting its position in the European market.
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March 2023: Laing O'Rourke is awarded a £1.5 billion contract to produce modular housing units for a major urban redevelopment project in London, demonstrating the rising acceptance of modular construction in large-scale residential developments.
1. INTRODUCTION
1.1. Market Definitions & Study Assumptions
1.2. Market Research Scope & Segment
1.3. Research Methodology
2. EXECUTIVE SUMMARY
2.1. Market Overview & Insights
2.2. Segment Outlook
2.3. Region Outlook
3. COMPETITIVE INTELLIGENCE
3.1. Companies Financial Position
3.2. Company Benchmarking -- Key Players
3.3. Market Share Analysis -- Key Companies
3.4. Recent Companies Key Activities
3.5. Pricing Analysis
3.6. SWOT Analysis
4. COMPANY PROFILES (Key Companies list by Country) (Premium)
5. COMPANY PROFILES
5.1. Skanska AB
5.2. Laing O'Rourke
5.3. Katerra
5.4. ATCO
5.5. Algeco Scotsman
5.6. Red Sea Housing
5.7. CIMC Modular Building Systems Holding
5.8. Bouygues Construction
5.9. VINCI Construction
5.10. Lendlease Corporation (LIST NOT EXHAUSTIVE)
6. MARKET DYNAMICS
6.1. Market Trends
6.1.1. Integration of advanced technologies enhances efficiency and customization in modular construction
6.1.2. Growing adoption of eco-friendly and sustainable modular solutions
6.1.3. Increasing use of modular construction in urban infill projects
6.2. Market Drivers
6.2.1. Increasing demand for fast and sustainable construction solutions drives modular market growth
6.2.2. Rising urbanization and need for affordable housing
6.2.3. Government initiatives promoting off-site construction methods
6.3. Market Restraints
6.3.1. Perception issues and transportation limitations challenge market expansion
6.3.2. Regulatory hurdles and lack of standardization in some regions
6.4. Market Opportunities
6.5. Porter's Five Forces Analysis
6.5.1. Threat of New Entrants
6.5.2. Bargaining Power of Buyers/Consumers
6.5.3. Bargaining Power of Suppliers
6.5.4. Threat of Substitute Products
6.5.5. Intensity of Competitive Rivalry
6.6. Supply Chain Analysis
6.7. Value Chain Analysis
6.8. Trade Analysis
6.9. Pricing Analysis
6.10. Regulatory Analysis
6.11. Patent Analysis
6.12. SWOT Analysis
6.13. PESTLE Analysis
7. BY TYPE (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
7.1. Permanent
7.1.1. Single-family Homes
7.1.2. Multi-story Buildings
7.2. Relocatable
7.2.1. Construction Site Offices
7.2.2. Temporary Education Facilities
8. BY MATERIAL (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
8.1. Steel
8.1.1. Light Gauge Steel
8.1.2. Heavy Steel Framing
8.2. Concrete
8.2.1. Precast Concrete Modules
8.2.2. Concrete Panel Systems
8.3. Wood
8.3.1. Cross-Laminated Timber (CLT)
8.3.2. Engineered Wood Products
8.4. Others
8.4.1. Composite Materials
8.4.2. Hybrid Systems
9. BY END-USER (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
9.1. Residential
9.1.1. Single-family Homes
9.1.2. Multi-family Apartments
9.2. Commercial
9.2.1. Offices
9.2.2. Retail Spaces
9.3. Industrial
9.3.1. Warehouses
9.3.2. Manufacturing Facilities
9.4. Healthcare
9.4.1. Hospitals
9.4.2. Clinics
9.5. Education
9.5.1. Schools
9.5.2. Universities
10. REGION (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
10.1. North America
10.1.1. United States
10.1.2. Canada
10.1.3. Mexico
10.2. South America
10.2.1. Brazil
10.2.2. Argentina
10.2.3. Rest of South America
10.3. Europe
10.3.1. Germany
10.3.2. United Kingdom
10.3.3. France
10.3.4. Italy
10.3.5. Spain
10.3.6. Rest of Europe
10.4. Asia-Pacific
10.4.1. China
10.4.2. Japan
10.4.3. India
10.4.4. Australia
10.4.5. South Korea
10.4.6. Rest of Asia-Pacific
10.5. Middle-East
10.5.1. UAE
10.5.2. Saudi Arabia
10.5.3. Turkey
10.5.4. Rest of Middle East
10.6. Africa
10.6.1. South Africa
10.6.2. Egypt
10.6.3. Rest of Africa
*NOTE: All the regions mentioned in the scope will be provided with (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
By Type:
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Permanent
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Relocatable
By Material:
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Steel
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Concrete
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Wood
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Others
By End-User:
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Residential
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Commercial
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Industrial
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Healthcare
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Education
By Region:
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North America
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Europe
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Asia-Pacific
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Latin America
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Middle East & Africa
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