Modular Construction Market Analysis

Global Modular Construction Market Overview

Modular Construction Market Trends

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  Rapid urbanization and industrialization, together with accelerated construction and high productivity, will drive market growth

  
  

The demand for infrastructure investment is increasing significantly everywhere, particularly in developing economies. Between 2014 and 2025, the globe is projected to spend almost USD 78 trillion on infrastructure development. Additionally, infrastructure expenditure has bounced back from the financial crisis and is anticipated to increase by more than USD 5 trillion by 2025. They are expected to spend more money on houses and companies as more people relocate to cities like India, Japan, Indonesia, Nigeria, Mexico, and China.

Additionally, modular building is growing in popularity because of its numerous benefits, including improved structural stability, quicker and better construction, greater flexibility, reduced waste, and reduced labor requirements. With all of these advantages, many newcomers are trying their luck in this industry to profit from its expansion and make a lot of money. As a result, more experts and even brand-new businesses are entering the market for modular buildings to gain notoriety.

Figure 1: Urban population growth (thousands): 1950-2050
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

The growing foundation speculations are predicted to push the measured development to promote growth due to the increase in industrialization and urbanization in developing countries like India, Vietnam, and China. In addition, increased commercial real estate speculation is predicted to contribute to the pre-assembled development display income significantly. For instance, commercial property rentals in India have grown by 30% in the first four months of 2019. According to secondary sources, the rental zone has an approximate area of about 60 million square feet. The government's initiatives to encourage eco-friendly building practices, construction techniques, and waste reduction are expected to increase demand for modular construction. For instance, pre-finished, prefabricated, and volumetric construction (PPVC) components must be used in all developments on land that the government of Singapore holds. This is supported by subsidies for participating businesses to standardize and improve modern construction methods (MMC) across the country, raising demand for off-site construction.

The modular construction industry is driven by advancing government initiatives to cut down on construction waste and promote green buildings. In several projects on government property, for instance, the government of Singapore has enforced the use of PPVC (prefabricated, pre-finished, volumetric construction) parts. In addition, the government gives businesses incentives that help standardize contemporary construction techniques. The Canadian Minister of Families and other members of Parliament announced on March 15, 2021, that the Rapid Housing Initiative would spend CAD 16.4 million in the Surrey Center to construct 44 new, affordable houses. Shortly, the prefabricated construction industry is anticipated to be driven by rising R&D expenditures for innovative building solutions.

When constructing projects, the healthcare industry looks for ways to expedite progress and reduce costs while maintaining a high-quality medical facility. Hospitals and other healthcare facility operators are relying on modular construction more than ever for their expansion requirements. Additionally, one environmentally friendly manufacturing method that has lately grown in favor is a modular building. Sustainable solutions are required, as is knowledge of the potential environmental effects of building alone. Therefore, such Rapid urbanization and government initiatives have enhanced the modular construction market CAGR ly in recent years.

However, to cater to the demand, significant advances in the construction technique and innovations are driving the growth of the Modular Construction Market revenue.

September 2023: The Modular Building Institute (MBI), a leading trade association for the modular construction industry, launched its "Building a Sustainable Future" initiative. This initiative focuses on promoting sustainable practices throughout the entire modular construction lifecycle, from material selection to energy efficiency.

November 2023: Studier, a UK-based modular construction company, completed the construction of the world's largest student accommodation building in Birmingham, England. This project showcases the potential of modular construction for large-scale, complex projects, further solidifying its position as a viable alternative to traditional construction methods.

Modular Construction Market Segment Insights

Modular Construction Material Type Insights

The Modular Construction Market segmentation, based on material type, includes Concrete, Steel, Plastic, Wood and Others. With a maximum share of almost 41.60 percent of the overall revenue, the steel segment became the largest in 2021. It is utilized in various shapes, including I-beam and T-shapes, columns, angles, and H-type beams. The material's excellent mechanical and chemical characteristics include high strength, tensile endurance, flexibility, ease of fabrication, seismic resistance, and quick erection speed. To make up for its poor tensile strength, it is employed as a reinforcing component in concrete. The market for other materials is predicted to have the strongest CAGR between 2022 and 2030.

Modular Construction Construction Insights

Based on construction, the Modular Construction Market segmentation includes relocatable and permanent. In 2021, the permanent modular construction product category dominated the market and generated more than 63.90% of total revenue. Additionally, it is anticipated to increase at the greatest rate between 2022 and 2030. Compared to on-site construction, it provides superior quality control. These modules can be created alone or integrated into an existing building.

Figure 2:  Modular Construction Market, by construction, 2021 & 2030 (USD Million)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Modular Construction Products Insights

Based on products, the  Modular Construction Market data includes walls, roofs & floor, columns & beams, and others. The product category for roof and floor construction dominated the market in 2021 and produced more than 43.90% of the overall revenue. Furthermore, it is predicted to grow most rapidly between 2022 and 2030. Modern building technology and sustainability are combined in modular buildings, which may be transported and used again as needed. Before the epidemic, the business was building a 4,000-person integrated worker housing project in Qatar. Students still reside in portable, readily demountable, and demountable modular housing units across Iran.

Modular Construction Regional Insights

By Region, the study provides market insights for modular construction into North America, Europe, Asia-Pacific and the Rest of the World. Asia Pacific Modular Construction Market accounted for USD 35.8 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. The expanding demand from the residential and commercial sectors is due to the expansion of the building industry. Furthermore, the demand for modular houses is rising due to aggressive government activities to support eco-friendly housing. India would see the highest CAGR due to the expanding commercial construction industry. Due to increased commercial building projects, India is anticipated to see the greatest CAGR. Foreign direct investment (FDI) in the I.T., telecommunications, healthcare and automobile sectors is the primary reason driving the demand for commercial spaces around the nation. Additionally, commercial modular construction is quickly gaining popularity among Indian builders and investors as a means of providing green building solutions.

Further, the major countries studied in the modular construction market report are The U.S., Canada, Germany, France, the U.K., Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3:  MODULAR CONSTRUCTION MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

In 2021, Europe's Modular Construction Market was the fastest-growing Region, with a maximum revenue share of almost 45.60%. High market penetration in Germany, Finland, the United Kingdom, and Sweden is responsible for the increase. Additionally, the growing number of migrants will stimulate the building of permanent and temporary housing structures in the area. Elements like many investments and the adoption of cutting-edge tech are also driving the regional market in Europe. Further, the Germany Modular Construction Market held the largest market share, and the U.K. Modular Construction Market was the fastest-growing market in the European Region.

North America Modular Construction Market was the second fastest-growing market. Reduced investments have further resulted in decreased investments in the non-residential sector, which is causing the building industry in North America to develop only moderately. Being a developed area and home to heavyweights like the U.S. and Canada, North America is responsible for a sizeable portion of the worldwide modular construction industry, which was worth USD 28 billion in 2021 and would reach USD 53 billion by 2030 at a CAGR of 7%. Further, the US Modular Construction Market held the largest market share, and the Canada Modular Construction Market was the fastest-growing market in the region.

Modular Construction Key Market Players & Competitive Insights

Major market players are investing a lot of money in R&D to expand their product portfolios, which will spur further market growth for Modular Construction. With significant industry changes including new product releases, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations, market participants are also undertaking a variety of strategic activities to expand their presence. Cost-effective products are a need for competitors in the modular construction industry if they want to grow and thrive in a market that is becoming more and more competitive.

Manufacturing locally to cut operational costs is one of the main business methods used by manufacturers in the worldwide modular construction industry to benefit customers and increase the market sector. The modular construction industry has recently given medicine some of the most important advantages. The Modular Construction Market major player such as Lendlease corporation, Guerdon modular building, Laing O’Rourke, Katerra, Red Sea Housing, Bechtel Corporation, Kleusberg and others are working on expanding the market demand by investing in research and development activities.

Located in Calgary, Alberta, ATCO Ltd., doing business as the ATCO Group, is a publicly listed Canadian engineering, logistics, and energy holding corporation. Some of ATCO's subsidiaries are electric utilities, distribution firms for natural gas, and construction firms. Microsoft and Atco Group struck a contract for long-term renewable energy power in April 2022.

With its headquarters in Barangaroo, New South Wales, Australia, Lendlease is a fully integrated real estate firm that develops and finances infrastructure projects, communities, and workplaces. Lendlease obtained the building contract for a 90-acre development project in the center of London in May 2022.

Key Companies in the Modular Construction Market include

• Lendlease Corporation


• Guerdon modular budiling


• Laing O'Rourke


• Katerra


• Red Sea Housing


• Bechtel Corporation


• Kleusberg

Modular Construction Industry Developments

March 2023: The U.S. Department of Energy (DOE) awarded $10 million in grants to support the development of modular construction technologies.

April 2023: The city of Los Angeles approved a new zoning ordinance that allows for the construction of modular homes in certain areas.

May 2023: The modular construction company Skanska announced that it will be opening a new manufacturing facility in the United States.

June 2023: The modular construction company Modulus announced that it has secured a $100 million investment from Goldman Sachs.

Modular Construction Market Segmentation

Modular Construction Material Outlook

• Concrete


• Steel


• Plastic


• Wood


• Other

Modular Construction Construction Outlook

• Permanent Modular


• Relocatable Modular

Modular Construction Products Outlook

• Walls


• Roofs & Floor


• Columns & Beams


• Others

Modular Construction Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America