The Modular Construction Market is estimated to be valued at US$ 84.48 Bn or billion in 2023 and is expected to exhibit a CAGR of 6.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Modular construction refers to a process in which buildings are constructed off-site in modules and transported to the construction site for assembly. Modular construction helps in saving construction time, cost, and resources. It involves pre-fabricated and modular components which are constructed at a manufacturing facility and assembled on-site in the final destination. Some common modular construction products include modular process skids, modular buildings, modular bathrooms, and modular classrooms. The adoption of modular construction is growing across residential, commercial, and industrial construction owing to its advantages of faster construction, flexibility, quality control, and sustainability.
The modular construction market is driven by the rapid rate of urbanization and infrastructure development across emerging economies. According to the United Nations, 55% of the world’s population currently lives in urban areas, a proportion that is expected to increase to 68% by 2050. This rising urbanization is generating massive demand for residential and commercial infrastructure development which is fueling the growth of modular construction. Another significant driver is the advantages of modular construction over traditional construction methods in terms of cost savings, reduced construction time, and controlled quality. Modular construction helps save up to 30% of the total construction cost and 50% of construction time. Additionally, modular construction allows flexibility in design, transport, assembly, relocation, and reuse of modules which is propelling its adoption across end-use industries.
The modular construction market can be segmented based on material, type, construction, and end-use. Based on material, steel is dominating the market as it is cost-effective, durable, and has high tensile strength. Concrete is another dominating segment due to its fire resistance, weather resistance and aesthetics.
Political: Modular market is driven by government regulations and policies towards affordable housing and reconstruction projects. Many countries provide tax benefits for modular construction.
Economic: High inflation rates make modular construction economical due to its cost efficiency and less wastage. Demand increases during economic growth periods due to rising disposable income.
Social: Rapid urbanization and nuclear family trends boost demand for affordable, quick to construct houses. Workforce safety is increased through factory production methods.
Technological: Developments in BIM, 3D printing, and nanotechnology aid customization, speed, sustainability, and quality control of modular buildings. Connected devices enable remote monitoring.
The global Modular Construction Market Share is expected to witness high growth at a CAGR of 6.5% over the forecast period of 2023 to 2030, driven by rapid urbanization and focus on efficient infrastructure development. Regionally, Asia Pacific holds the largest share currently due to strong demand from China, India and other developing nations undergoing infrastructure development. North America is anticipated to emerge as the fastest growing regional market owing to supportive government policies in the US and Canada promoting offsite construction methods.
Key players operating in the modular construction market are Guerdon Modular Buildings (U.S.), Laing O’Rourke (U.K.), ATCO (Canada), Red Sea International Company (Saudi Arabia), Bouygues Construction (France), VINCI Construction Grands Projets (U.K.), Skanska AB (Sweden), Algeco (U.K.), KLEUSBERG GmbH & Co. KG (Germany), and Katerra (U.S.), Lendlease Corporation (Australia). Major players are focused on adopting newer technologies like robotics, automation, and 3D printing to improve productivity and efficiency. Strategic partnerships and mergers/acquisitions have also increased in the modular construction space over the past few years.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it