Modular Construction Market by Type (Permanent, Relocatable), Module, Material (Wood, Steel, Concrete), End-Use Industry (Residential, Office, Education, Retail & Commercial, Hospitality, Healthcare), Region - Global Forecast to 2029
Modular Construction Market
The global modular construction market size is projected to grow from USD 104.1 billion in 2024 to USD 140.8 billion by 2029, at a CAGR of 6.2% during the forecast period.
Modular construction revolutionizes traditional building methods by prefabricating standardized modules or components off-site in controlled factory conditions before assembling them on-site to create structures. This innovative approach offers numerous advantages, including faster project completion times, reduced construction costs, and improved quality control. Moreover, modular construction promotes sustainability by minimizing material waste and energy consumption compared to conventional construction methods. Its versatility allows for the creation of diverse building types, from residential homes and commercial buildings to educational facilities and healthcare centers. As a result, modular construction has gained popularity worldwide as an efficient, cost-effective, and sustainable solution to meet the evolving needs of the construction industry.
Attractive Opportunities in the Modular Construction Market
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Modular Construction Market Dynamics
Driver: Increasing focus on workplace safety and sustainability
The increasing focus on workplace safety and the imperative to reduce construction waste have emerged as significant drivers of the modular construction market, contributing to its sustainability. Modular construction inherently promotes a safer work environment by shifting much of the construction process to controlled factory settings, minimizing on-site risks associated with traditional building methods. Moreover, the precision manufacturing techniques employed in modular construction reduce material waste and optimize resource utilization, leading to a more sustainable construction process. By streamlining production and assembly processes, modular construction also reduces energy consumption and carbon emissions associated with transportation and on-site construction activities. Overall, the emphasis on workplace safety and sustainability underscores the growing importance of modular construction as a viable solution for meeting the demands of modern construction while minimizing environmental impact.
Restraint: Lack of proper recycling infrastructure
The risk of transportation and assembly issues poses a significant restraint in the modular construction market. While modular construction offers numerous benefits, including faster project completion times and reduced on-site construction risks, the transportation and assembly of prefabricated modules can present logistical challenges. Transportation of large modular components to construction sites may encounter delays, especially when navigating through congested urban areas or facing adverse weather conditions. Additionally, the assembly process requires precise coordination and skilled labour to ensure proper alignment and integration of modules, which can be complicated by unforeseen site conditions or discrepancies in dimensions. These transportation and assembly issues can result in project delays, increased costs, and potential quality issues, thereby dampening the widespread adoption of modular construction.
Opportunity: The growing population and urbanisation increasing the number of construction projects
The burgeoning global population and rapid urbanization present a significant market opportunity for the modular construction industry. With more people migrating to urban centers, there is a pressing need for efficient and sustainable solutions to accommodate the increasing demand for housing, infrastructure, and commercial spaces. Modular construction offers a compelling solution by streamlining the building process, reducing construction time, and mitigating the challenges associated with traditional construction methods in densely populated urban areas. Additionally, the versatility and scalability of modular construction make it well-suited for addressing diverse housing needs, from affordable housing projects to luxury developments, as well as commercial and institutional buildings. By leveraging modular construction techniques, developers and governments can accelerate construction timelines, alleviate housing shortages, and foster more resilient urban environments. As urbanization continues to accelerate worldwide, modular construction stands poised to play a pivotal role in meeting the evolving demands of rapidly growing cities and populations.
Challenge: Lack of experts
A significant challenge facing the modular construction market is the shortage of experts with specialized knowledge and skills in this field. Modular construction requires a unique set of expertise spanning design, manufacturing, logistics, and on-site assembly. However, the relatively niche nature of modular construction has led to a scarcity of professionals with hands-on experience and in-depth understanding of its intricacies. This shortage of experts can result in delays, quality issues, and cost overruns as projects struggle to find skilled personnel capable of managing and executing modular construction projects effectively. Addressing this challenge will require investment in training and education programs to cultivate a new generation of modular construction professionals and foster collaboration between industry stakeholders to share knowledge and best practices. By overcoming the lack of experts in the market, the modular construction industry can unlock its full potential and drive further growth and innovation in the built environment.
Modular Construction Market Ecosystem
By Material, Wood to have the highest market share in the forecast period
Wood is the largest segment in the modular construction market among steel, concrete, and wood due to several key factors. Firstly, wood is widely available and renewable. Additionally, wood is easy to work with, allowing for efficient transportation and assembly of modular components. Moreover, wood offers excellent thermal insulation properties, contributing to energy efficiency and sustainability in buildings. Furthermore, wood's aesthetic appeal and versatility make it a popular choice for a wide range of modular construction applications, including residential homes, commercial buildings, and educational facilities. Overall, these advantages position wood as the dominant segment in the modular construction market, driving its widespread adoption and continued growth.
By Type, permanent modular construction to have the highest market share in the forecast period
Permanent modular construction dominates the modular construction market primarily due to its versatility, durability, and ability to meet diverse building requirements. Unlike relocatable modular construction, which is typically used for temporary or semi-permanent structures, permanent modular construction offers long-lasting solutions suitable for various applications, including residential, commercial, and industrial buildings. Additionally, permanent modular construction provides greater design flexibility and customization options, allowing for the creation of aesthetically pleasing and architecturally diverse structures. Moreover, the quality control measures implemented in permanent modular construction ensure consistent standards of safety, quality, and durability, making it a preferred choice for developers, architects, and clients seeking reliable and resilient building solutions. Overall, the inherent advantages of permanent modular construction position it as the dominant player in the modular construction market for both permanent and relocatable types.
By end-use industry, the residential segment to register the highest CAGR in the forecast period
The residential segment stands out as the fastest-growing segment in the modular construction market among residential, office, healthcare, hospitality, education, and others due to several key factors. Firstly, the increasing global population and urbanization have led to a growing demand for housing solutions, particularly in densely populated urban areas. Modular construction offers a timely and efficient solution to address this demand by significantly reducing construction timelines and costs compared to traditional building methods. Additionally, the customizable nature of modular construction allows for a wide range of residential designs and configurations, catering to diverse housing needs and preferences. Furthermore, the inherent benefits of modular construction, such as enhanced quality control, reduced material waste, and improved sustainability, further contribute to its appeal in the residential sector. As a result, developers, homeowners, and governments are increasingly turning to modular construction to meet the pressing need for affordable, high-quality housing, driving the rapid growth of the residential segment in the modular construction market.
Asia Pacific dominated the market in 2023
The Asia-Pacific (APAC) region has emerged as the dominant force in the modular construction market among APAC, North America, Europe, South America, and the Middle East and Africa due to several key factors. Firstly, APAC countries, such as China, Japan, and India, are experiencing rapid urbanization and population growth, driving the demand for affordable and efficient construction solutions. Modular construction offers a viable solution to address this demand by providing faster project delivery times and cost-effective building methods. Additionally, governments in the APAC region are increasingly promoting modular construction as part of their sustainable development initiatives, encouraging its adoption through supportive policies and incentives. Furthermore, the presence of established modular construction manufacturers and suppliers in APAC, coupled with advancements in technology and manufacturing capabilities, has bolstered the region's dominance in the global modular construction market. Overall, the combination of burgeoning urbanization, government support, and industry expertise has propelled APAC to the forefront of the modular construction market, driving its continued dominance in the years to come.
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Modular Construction Market Players
The Modular construction market comprises key manufacturers such as Laing O’Rourke (UK), Red Sea Housing (Saudi Arabia), Atco Ltd. (Canada), Skanska AB (Sweden), Modulaire Group (UK), Bechtel Corporation (US), Fluor Corporation (US), Lendlease Corporation (Australia), Kleusberg GmbH (Germany), and others. Expansions, collaborations, and deals were some of the major strategies adopted by these key players to enhance their positions in the modular construction market. A major focus was given to the new projects and contracts.
Modular Construction Market Report Scope
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Report Metric |
Details |
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Market size available for years |
2022-2029 |
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Base year considered |
2023 |
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Forecast period |
2024-2029 |
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Forecast units |
Value (USD million/USD Billion) and Volume (Thousand Square Feet) |
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Segments Covered |
Type, Material, Module, End-Use Industry, and Region |
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Geographies covered |
North America, Asia Pacific, Europe, Middle East & Africa, and South America |
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Companies covered |
Laing O’Rourke (UK), Red Sea Housing (Saudi Arabia), Atco Ltd. (Canada), Skanska AB (Sweden), Modulaire Group (UK), Kleusberg GmbH (Germany), Lendlease Corporation (Australia), Bechtel Corporation (US), Fluor Corporation (US). |
This research report categorizes the modular construction market based on type, material, module, end-use sector, and region.
Modular Construction Market, Based on type:
- Permanent
- Relocatable
Modular Construction Market, Based on the Material:
Modular Construction Market, Based on the Module:
- Four-sided
- Open-sided
- Partially open-sided
- Mixed modules & floor cassettes
- Modules supported by a primary structure
- Others
Modular Construction Market, Based on the End-Use Sector:
- Residential
- Office
- Education
- Retail & Commercial
- Hospitality
- Healthcare
- Others
Modular Construction Market, Based on the region:
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- South America
Recent Developments
- In 2021, the Chinese company Broad Group accomplished the construction of a modular 10-storey apartment block, known as the Living Building, in Changsha, China, in just over a day. The building was assembled by cranes assembling in 28 hours.
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In July 2022, Robotics Australia Group and Laing O’Rourke entered a partnership to integrate robotic-related technologies in modular construction.
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In December 2023, Red Sea International has entered into an agreement with Baker Hughes Company, a global leader in oilfield services. This four-year agreement entails the design, manufacture, supply, and operation of modular accommodation facilities in the Eastern Province, aimed at supporting oil exploration operations in the region.
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In June 2021, Red Sea International was granted a contract by The Royal Commission for Al Ula (RCU) for the comprehensive design, construction, supply, and installation of 150 modular accommodation units.
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In 2021, Skanska UK and Abri made a partnership to build over 750 modular homes in the UK in the next five years.
Frequently Asked Questions (FAQ):
What are the major drivers driving the growth of the modular construction market?
The major drivers influencing the growth of the modular construction market are increasing infrastructure investments, the growing need for speedy construction, and increased sustainability.
What are the major challenges in the modular construction market?
The major challenge is the lack of experts in the market.
What are the restraining factors in the modular construction market?
The major restraints in the modular construction market are risk of transportation and assembly issues.
What is the key opportunity in the modular construction market?
Population growth and urbanization translating to increased number of construction projects is a major opportunity in the modular construction market.
Who are the key players in the global modular construction market?
The key players operating in the modular construction market are Laing O’Rourke (UK), Red Sea Housing (Saudi Arabia), Atco Ltd. (Canada), Skanska AB (Sweden), Modulaire Group (UK), Bechtel Corporation (US), Fluor Corporation (US), Lendlease Corporation (Australia), Kleusberg GmbH (Germany) amongst others.
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The study involved four major activities for estimating the current global size of the modular construction market. Exhaustive secondary research was conducted to gather information on the market, the peer market, and the parent market. The next step was to validate these findings, assumptions, and sizes with the industry experts across the value chain of modular construction through primary research. Both the top-down and bottom-up approaches were employed to estimate the overall size of the modular construction market. After that, market breakdown and data triangulation procedures were used to determine the size of different segments and sub-segments of the market.
Secondary Research
In the secondary research process, various secondary sources such as Hoovers, Factiva, Bloomberg BusinessWeek, and Dun & Bradstreet were referred to, to identify and collect information for this study on the modular construction market. These secondary sources included annual reports, press releases & investor presentations of companies, white papers, certified publications, articles by recognized authors, regulatory bodies, trade directories, and databases.
Primary Research
Various primary sources from both the supply and demand sides of the modular construction market were interviewed to obtain qualitative and quantitative information. The primary sources from the supply-side included industry experts, such as Chief Executive Officers (CEOs), vice presidents, marketing directors, sales professionals, and related key executives from various leading companies and organizations operating in the modular construction industry. The breakdown of the profiles of primary respondents is as follows:
BREAKDOWN OF PRIMARY INTERVIEWS
Notes: Companies are classified based on their revenue–Tier 1 = >USD 7 billion, Tier 2 = USD 500 million to USD 7 billion, and Tier 3 =
Others include sales, marketing, and product managers.
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
Both the top-down and bottom-up approaches were used to estimate and validate the global size of the modular construction market. These approaches were also used extensively to estimate the size of various dependent segments of the market. The research methodology used to estimate the market size included the following details:
- The key players were identified through extensive secondary research.
- The industry’s supply chain and market size, in terms of value, were determined through primary and secondary research processes.
- All percentage shares, split, and breakdowns were determined using secondary sources and verified through primary sources.
- All possible parameters that affect the markets covered in this research study were accounted for, viewed in extensive detail, verified through primary research, and analysed to obtain the final quantitative and qualitative data.
- The research includes the study of reports, reviews, and newsletters of key industry players, along with extensive interviews with key officials, such as directors and marketing executives.
Data Triangulation
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After arriving at the overall market size from the estimation process explained above, the total market was split into several segments and sub-segments. The data triangulation and market breakdown procedures were employed, wherever applicable, to complete the overall market engineering process and arrive at the exact statistics for all segments and sub-segments of the modular construction market. The data was triangulated by studying various factors and trends from both the demand- and supply-side. In addition, the market size was validated by using both the top-down and bottom-up approaches. Then, it was verified through primary interviews. Hence, for every data segment, there are three sources—top-down approach, bottom-up approach, and expert interviews. The data were assumed to be correct when the values arrived at from the three sources matched.
Market Definition
The modular construction market refers to the industry sector encompassing the design, fabrication, and assembly of building components in controlled factory environments for subsequent installation at construction sites. This approach to construction involves the prefabrication of standardized modules or components, which are then transported and assembled on-site to create structures ranging from residential homes and commercial buildings to industrial facilities and infrastructure projects.
Key Stakeholders
- Raw material suppliers
- Modular construction manufacturers
- Government & regulatory bodies
- Research organizations
- Associations and industry bodies
- Contractors, architects, and engineers
- End users
- Traders and distributors
Report Objectives
- To estimate and forecast the modular construction market, in terms of value and volume.
- To provide detailed information about the major factors (drivers, restraints, opportunities, and challenges) influencing the market growth.
- To define, describe, and forecast the market size, based on type, material, end-use industry, and region.
- To forecast the market size along with segments and submarkets, in key regions: North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America along with their key countries.
- To strategically analyze micromarkets, with respect to individual growth trends, prospects, and their contribution to the total market.
- To analyze growth opportunities in the market for stakeholders and provide details on the competitive landscape for market leaders.
- To strategically profile key players and comprehensively analyze their market shares and core competencies.
- To analyze competitive developments, such as merger & acquisition, expansion & investment, agreement, and new product development in the modular construction market.
Available Customizations
With the given market data, MarketsandMarkets offers customizations according to client-specific needs.
The following customization options are available for the modular construction report:
Product Analysis
- Product matrix, which offers a detailed comparison of the product portfolio of companies
Regional Analysis
- Further analysis of the modular construction market for additional countries
Company Information
- Detailed analysis and profiling of additional market players (up to five)
Generating Response ...
Growth opportunities and latent adjacency in Modular Construction Market