Modular Construction Market

Market Overview:

The global modular construction market size reached US$ 86.2 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 137.2 Billion by 2032, exhibiting a growth rate (CAGR) of 5.2% during 2024-2032. The rising need for rapid construction in urban areas, rising demand for energy efficiency in construction, continual innovations and customization in architectural designs, and the escalating demand for affordable housing are some of the factors that are propelling the market.

Modular construction refers to a method where a building or structure is constructed off-site, using the same materials and adhering to the same standards as conventional on-site construction, but in a controlled factory environment. The process involves the production of individual components known as modules, which are assembled on-site to complete the final structure. These modules are manufactured with precision and efficiency, ensuring consistent quality and conformity to specific design standards. It is characterized by flexibility in design, controlled environment manufacturing, and the potential for enhanced sustainability.

The global market is primarily driven by the rising need for rapid construction in urban areas, enhancing its appeal for time-sensitive projects. In line with this, the consistent quality control offered by manufacturing in controlled environments is adding momentum to the market. Moreover, government initiatives promoting sustainable construction practices are acting as significant growth-inducing factors. In addition to this, the ability to minimize construction waste aligns with global sustainability goals, creating a favorable environment for this method. Also, technological advancements in manufacturing and assembly processes are positively impacting the market. The market is further driven by the requirement for buildings that can withstand extreme weather conditions, leading to a preference for this method. Some of the other factors contributing to the market include the growing awareness regarding the long-term benefits including reduced maintenance and increased durability, inflating disposable income levels and an enhanced focus on sustainable development.

Modular Construction Market Trends/Drivers:

Rising Demand for Energy Efficiency in Construction

The global emphasis on energy efficiency is playing a critical role in stimulating the market. As nations strive to meet stringent energy-saving targets, the adoption of construction practices that minimize energy consumption is gaining momentum. It facilitates better insulation and energy control, owing to the precision in manufacturing and assembly within controlled environments. This leads to structures with enhanced thermal performance and a marked reduction in energy consumption for heating and cooling. The alignment of construction methods with international efforts to reduce greenhouse gas emissions and conserve finite resources makes it a sought-after choice. This energy-efficient approach not only lowers operational costs but also contributes to environmental stewardship, which resonates with a growing environmentally conscious consumer base.

Continual innovations and customization in Architectural Designs:

Another vital driver of the market is the burgeoning demand for innovation and customization in architectural designs. Unlike traditional construction methods, modular methods enable a broader range of aesthetic and functional solutions, allowing architects to explore unique designs without significant cost escalation. The controlled manufacturing process ensures precision, enabling intricate customization that may be cumbersome in conventional on-site construction. The adaptability of this construction method to client needs extends beyond aesthetics to include unique functional requirements, such as specific spatial arrangements or the incorporation of advanced technological features. This flexibility fosters a new era of creativity within the construction sector, accommodating both artistic expression and practical necessity. The blend of innovation and customization within modular construction technologies is positioning it as a desirable alternative, facilitating more personalized and dynamic built environments.

Escalating Demand for Affordable Housing

The escalating demand for affordable housing, particularly in densely populated urban areas and emerging economies, represents a significant impetus for the growth of the market. The efficiency of modular construction translates to cost savings without compromising quality, enabling developers to address a fundamental global challenge. With urbanization trends showing no signs of slowing down, the demand for housing solutions that balance cost, quality, and speed is at an all-time high. The scalable nature and controlled manufacturing process enable quicker project completion, thus reducing financing costs. Furthermore, the potential for mass production aligns with the need for large-scale housing projects. In the context of social equity, governments and developers are recognizing the potential of modular construction to contribute to housing accessibility. This method's alignment with the pressing need for affordable, quality housing solutions makes it an essential driver for the market growth.

Modular Construction Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global modular construction market report, along with forecasts at the global, regional and country levels from 2024-2032. Our report has categorized the market based on type, module type, material, and end use.

Breakup by Type:

• Permanent
• Relocatable
   

Permanent accounts for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the type. This includes permanent and relocatable. According to the report, permanent represented the largest segment.

The permanent segment is driven by the increasing need for lasting structures that match conventional buildings in terms of durability and strength. The assurance of long-term stability with a shorter construction timeframe is appealing for both residential and commercial applications. The preference for structures that stand the test of time without compromising quality or aesthetics is boosting this segment of the market.

On the other hand, the demand for relocatable segment is growing due to its adaptability and flexibility in meeting temporary space needs. These structures are often used in industries such as education and healthcare, where temporary expansion or relocations might be necessary. The capacity to dismantle and reconstruct these structures without significant loss in quality is a significant driver for this segment.

Breakup by Module Type:

• Four Sided
• Open Sided
• Partially Open Sided
• Mixed Modules and Floor Cassettes
• Modules Supported by a Primary Structure
• Others
   

Modules supported by a primary structure represents the largest market segment

The report has provided a detailed breakup and analysis of the market based on the module type. This includes four sided, open sided, partially open sided, mixed modules and floor cassettes, modules supported by a primary structure, and others. According to the report, modules supported by a primary structure represented the largest segment.

Modules supported by a primary structure offer enhanced structural integrity, often used in high-rise or large-scale projects. The combination of modules with primary support adds to the building's stability and safety. The ability to achieve tall or extensive structures through this method is appealing for commercial and large residential developments.

On the other hand, four-sided modular construction offers comprehensive enclosure, providing enhanced stability and insulation. This type is often chosen for permanent structures where full protection from external elements is essential, such as in extreme weather conditions. The robustness and weather-resilience of four-sided modules make them preferred in many commercial and residential applications.

Additionally, open-sided modular construction is favored in scenarios that require natural ventilation and integration with surrounding landscapes. This design finds utility in recreational facilities, hospitality, and certain commercial spaces that seek a blend of indoor and outdoor environments. The appeal of an open architectural aesthetic, coupled with the potential for energy savings, drives this segment.

Moreover, partially open-sided constructions offer a balance between enclosed spaces and open areas, allowing for both security and ventilation. This approach is popular in retail and commercial spaces that require a blend of openness and enclosure. The versatility and adaptability of partially open-sided constructions to various design requirements fuel their demand.

Additionally, mixed modules and floor cassettes allow for complex designs and customized layouts, providing architects with more creative freedom. The ability to mix and match different components to achieve specific design goals is attractive in commercial and high-end residential construction. This approach enables innovative architectural solutions and is driving this segment.

Breakup by Material:

• Steel
• Concrete
• Wood
• Plastic
• Others
   

Steel accounts for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the material. This includes steel, concrete, wood, plastic, and others. According to the report, steel represented the largest segment.

Steel construction is favored for its strength, durability, and resistance to environmental conditions. The application of steel is widespread in commercial and industrial settings, where robust construction is essential. The recyclability of steel aligns with sustainability goals, further enhancing its appeal.

On the other hand, concrete modules offer solid construction with excellent sound insulation and fire resistance. This material is often chosen for permanent structures in both residential and commercial sectors, including schools and hospitals. Its inherent durability and protective qualities drive its demand in the market.

Moreover, the wooden segment is gaining traction due to its aesthetic appeal and sustainable attributes. Utilized in residential and hospitality sectors, wood offers a natural and warm appearance. Its renewable nature and the potential for carbon sequestration align with environmental considerations.

Furthermore, the plastic modular construction is appealing for its lightweight nature and resistance to corrosion. Often used in temporary or specialty constructions, such as emergency shelters or outdoor facilities, plastic offers flexibility and cost-efficiency. Its adaptability to various applications supports its growth in the market.

Breakup by End Use:

• Residential
• Commercial
• Education
• Retail
• Hospitality
• Healthcare
• Others
   

Residential represents the largest market segment

The report has provided a detailed breakup and analysis of the market based on the end use. This includes residential, commercial, education, retail, hospitality, healthcare, and others. According to the report, residential represented the largest segment.

The residential segment is growing due to the demand for affordable and quickly constructed housing solutions. Modular construction's ability to provide cost-effective, customizable homes is particularly attractive in urban areas. This segment is further supported by the increased consumer interest in sustainable living options.

On the other hand, the commercial segment is driven by the need for efficient, customizable office and retail spaces. Modular construction allows for adaptability in design, facilitating brand-specific customization. Its alignment with rapid urbanization and commercial expansion trends fuels this segment.

In the education, retail, hospitality, and healthcare sectors, modular construction provides solutions for quick expansions or temporary facilities. The ability to construct classrooms or administrative spaces in a short timeframe without compromising quality meets the dynamic needs of educational institutions, brand identities, different hospitality needs, or stringent medical requirements. The cost-effectiveness and adaptability of this method are vital for these segments. The ability to create aesthetically pleasing, customized spaces that cater to different hospitality needs is crucial. This segment is further supported by the growing trend towards sustainable and eco-friendly construction practices.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

North America exhibits a clear dominance, accounting for the largest modular construction market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, North America accounted for the largest market share.

In North America, the modular construction market is experiencing significant growth, driven by a combination of socio-economic and regulatory factors. The emphasis on sustainable construction methods in developed countries such as the U.S. and Canada is fueling interest in modular building practices, known for reducing waste and energy consumption.

Additionally, the region's focus on innovation and technological advancements has created an environment where modular construction, with its precision manufacturing and customization, thrives. The escalating urbanization and associated demand for rapid construction solutions are compelling industry players to adopt modular techniques.

The availability of skilled labor and sophisticated manufacturing technology further enables quality control, making this approach attractive for various construction sectors. Government initiatives promoting energy efficiency and affordable housing also play a crucial role in the regional market growth. The diversity in architectural preferences across North America, coupled with the flexibility of modular construction, is a contributing factor as well.

Furthermore, the strong economic investment in infrastructure development and the growing awareness about long-term environmental responsibilities are essential driving forces, positioning modular construction as a strategic solution in North America's construction landscape.

Competitive Landscape:

The top players in the market are dedicating resources to innovation and the development of new materials and construction techniques. By focusing on R&D, they can create more efficient, sustainable, and adaptable modular solutions that meet evolving customer needs. Many companies are prioritizing eco-friendly practices by utilizing sustainable materials and energy-efficient construction methods to appeal to a growing segment of environmentally conscious consumers and comply with increasingly stringent environmental regulations. Also, they are expanding into new regions with rising urbanization and construction needs for diversifying their consumer base and tapping into growing economies. Furthermore, they are also forming strategic alliances and collaborations with architects, developers, and other industry stakeholders for strengthening their market position.

The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Algeco
• Balfour Beatty plc
• Bouygues
• Etex Group
• Guerdon LLC
• KLEUSBERG GmbH & Co KG
• Laing O'Rourke
• Larsen & Toubro Limited
• Lendlease Corporation
• Red Sea International
• Skanska AB
• Taisei Corporation

Recent Developments:

• In July 2023, Algeco completed the new modular Starbucks restaurant in Derby in just 6 weeks. Algeco installed the shell in 2 weeks, delivering modules with a PMV (Pre Manufactured Value) of over 80%. This allowed the restaurant to generate income more quickly than a traditional on-site build, contributing to a quicker return on investment.
• In July 2023, Balfour Beatty announced today that it has acquired a 168-unit/592-bed student housing community in Tallahassee, Florida. The acquisition expands the company’s overall Florida footprint to 12 residential properties. The property will be managed internally by the Company’s residential management division, Balfour Beatty Communities.
• In June 2023, Etex Group closed the acquisition of UK insulation producer Superglass. Through this deal, Etex expands its already strong activities in the UK and complements the extensive European sales and production network of its Insulation division. With this latest acquisition of Superglass, Etex’s Insulation division consists of 11 plants across Europe, over 1,500 employees and two brands: Superglass and URSA.

Modular Construction Market Report Scope:

Key Questions Answered in This Report:

• How has the global modular construction market performed so far, and how will it perform in the coming years?
• What are the drivers, restraints, and opportunities in the global modular construction market?
• What is the impact of each driver, restraint, and opportunity on the global modular construction market?
• What are the key regional markets?
• Which countries represent the most attractive modular construction market?
• What is the breakup of the market based on the type?
• Which is the most attractive type in the modular construction market?
• What is the breakup of the market based on the module type?
• Which is the most attractive module type in the modular construction market?
• What is the breakup of the market based on the material?
• Which is the most attractive material in the modular construction market?
• What is the breakup of the market based on the end use?
• Which is the most attractive end use in the modular construction market?
• What is the competitive structure of the global modular construction market?
• Who are the key players/companies in the global modular construction market?

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the modular construction market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global modular construction market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the modular construction industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.