Modular Construction Market by Type (Permanent, Relocatable), Material (Precast Concrete, Steel Wood, Plastic), End-use Sector (Housing, Commercial, Education, Healthcare, Industrial), and Region - Global Forecast to 2023
By: marketsandmarkets.com
Publishing Date: August 2018
Report Code: BC 6498
The modular construction market was valued at USD 106.15 billion in 2017 and is projected to reach USD 157.19 billion by 2023, at a CAGR of 6.9% during the forecast period. The base year considered for the study is 2017 and the forecast period is 2018-2023.
The report aims at estimating the market size and growth potential of the modular construction market across different segments on the basis of type, material, module, end-use sector, and region. It also provides detailed information regarding the major factors influencing the growth of the market (drivers, restraints, opportunities, and industry-specific challenges). The report further aims to study individual growth trends, prospects, and contribution of various segments to the overall market. The study also analyzes the opportunities in the market for stakeholders and provides details of the competitive landscape of the market. It strategically profiles key players and comprehensively analyzes their core competencies.
The research methodology used to estimate and forecast the size of the modular construction market started with capturing data on percentage contribution of modular construction in overall construction sector, market size of each type of modular construction through secondary research from sources such as companies’ websites, articles on modular construction, and association reports. Vendor offerings were taken into consideration to determine the market segmentation. The bottom-up procedure was employed to arrive at the overall size of the modular construction market by estimating the market size of each type of modular construction. After arriving at the overall market size, the total market was split into the materials segment, which was then verified through primary research by conducting extensive interviews with key personnel, such as CEOs, VPs, directors, and executives. Data triangulation and market breakdown procedures were employed to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments. The breakdown of profiles of primary participants is depicted in the figure below:
To know about the assumptions considered for the study, download the pdf brochure
The market ecosystem includes various stakeholders involved in the supply chain of the modular construction market starting from the procurement of raw materials to final module manufacturing. Post this, the marketing and sales of products take place, which is possible if an efficient distribution channel is developed. Finally, end products are made available to potential end users. The market for modular construction is led by major players such as Laing O’Rourke (UK), Red Sea Housing (Saudi Arabia), ATCO (Canada), Bouygues Construction (France), VINCI (France), Skanska AB (Sweden), Algeco Scotsman (US), KLEUSBERG GmbH & Co. KG (Germany), KEF Katerra (India), and Lendlease Corporation (Australia).
Target Audience
- Raw Material Suppliers
- Module Manufacturers
- Modular Construction Service Providers
- End Users
- Associations and Industry Bodies
- Government & Regulatory Bodies
Scope of the Report:
The modular construction market has been segmented into the following submarkets:
By Type:
- Permanent
- Relocatable
ByMaterial:
- Steel
- Precast Concrete
- Wood
- Plastic
- Others
By End-use Sector:
- Housing
- Commercial
- Education
- Healthcare
- Industrial
By Region:
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- South America
Drivers
Growth in infrastructure investment and industrialization
Infrastructure spending is a key driver of the global and regional economies. It is expected that spending on capital projects and infrastructure will grow significantly over the next decade. China, India, and other countries in Asia Pacific, along with South Africa and Brazil, are investing considerably in the infrastructure industry. This investment is required for modernization and commercialization. Rapid urbanization in emerging markets such as India, Malaysia, Thailand, and Brazil are expected to boost the spending for vital infrastructure sectors, such as power, construction, and transportation. The improvement in economic conditions of emerging markets is projected to drive the use of modular construction.
Increase in concern towards work-zone safety and need for lower environment impacts
The fatality rate in the construction sector has remained constant. Safety continues to be a key challenge in the construction industry, which the benefits offered by modular construction can help to address. Indoor construction environment reduces the risks related to accidents and related liabilities for workers. The use of modular construction for creating & developing buildings, bridges, and stadiums has increased work-zone safety. For instance, while constructing a bridge on-site, workers are exposed to high-speed traffic for a long time, along with other on-site construction hazards, which increases the possibility of accidents. The modular construction process minimizes these threats. Furthermore, this modern construction technique reduces the need for workers on ladders or scaffolding that leads to less risk of fall and also avoids close work in tight spaces.
Restraints
Economic downturn in major regions
The demand for modular construction is entirely dependent on the demand for new construction, which is directly related to the economic condition of any country, region, or the world as a whole. After the recession in the global financial market, the demand for new construction lost priority. Unemployment and low disposable income radically affected the GDPs of countries.
Countries such as Spain, Greece, Romania, and the UK are still affected by the economic slowdown that occurred between 2007 and 2009. Post the economic slowdown, the GDP of Russia declined to -3.7% in 2015, after registering a positive growth of 0.7% in 2014, while that of Poland went up to 3.6%. With the decline in GDPs, these major regions witnessed a very low number of infrastructural activities; demand for new construction was negligible. This affected the construction industry adversely, which in turn will affect 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 product portfolio of each company
Geographic Analysis
- Further breakdown of the modular construction market for additional countries
Company Information
- Detailed analysis and profiling of additional market players
Table of Contents
1 Introduction (Page No. - 16)
1.1 Objectives of the Study
1.2 Market Definition
1.3 Market Scope
1.3.1 Regional Scope
1.3.2 Periodization Considered
1.4 Currency Considered
1.5 Unit Considered
1.6 Stakeholders
2 Research Methodology (Page No. - 20)
2.1 Research Data
2.1.1 Secondary Data
2.1.1.1 Key Data From Secondary Sources
2.1.2 Primary Data
2.1.2.1 Key Data From Primary Sources
2.1.2.2 Breakdown of Primaries
2.2 Market Size Estimation
2.3 Data Triangulation
2.4 Research Assumptions
2.5 Research Limitations
3 Executive Summary (Page No. - 27)
4 Premium Insights (Page No. - 31)
4.1 Emerging Economies to Shift Its Focus Toward Modular Construction
4.2 Modular Construction Market, By Type
4.3 Modular Construction Market, By Material
4.4 Modular Construction Market, By End-Use Sector
4.5 Asia Pacific Modular Construction Market, By End-Use Sector & Country
4.6 Modular Construction Market: Key Countries
5 Market Overview (Page No. - 35)
5.1 Introduction
5.2 Market Dynamics
5.2.1 Drivers
5.2.1.1 Growth in Infrastructure Investment and Industrialization
5.2.1.2 Increase in Concern Toward Work-Zone Safety and Need for Lower Environment Impacts
5.2.1.3 Need for Reduced Construction Time and Cost
5.2.1.4 Ease of Installation and Relocation
5.2.1.5 Supportive Government Initiatives
5.2.2 Restraints
5.2.2.1 Economic Downturn in Key Regions
5.2.3 Opportunities
5.2.3.1 Increase in Population and Rapid Urbanization Translating to A Large Number of New Construction Projects
5.2.4 Challenges
5.2.4.1 Lack of Awareness
5.2.4.2 Volatility in Transportation Charges Can Create an Unpredictable Business Environment
6 Industry Trends (Page No. - 42)
6.1 Introduction
6.2 Supply Chain
6.2.1 Product Development & Distribution are an Integral Part of the Supply Chain in the Modular Construction Market
6.2.2 Prominent Companies
6.2.3 Small & Medium Enterprises
6.3 Porter’s Five Forces Analysis
6.3.1 Threat of New Entrants
6.3.2 Threat of Substitutes
6.3.3 Bargaining Power of Suppliers
6.3.4 Bargaining Power of Buyers
6.3.5 Intensity of Competitive Rivalry
6.4 Macroeconomic Overview
6.4.1 Rise in Population
6.4.2 Increase in Middle-Class Population, 2009–2030
6.4.3 Developing Economies: GDP (Ppp) Growth, 2015
6.4.4 GDP & Contribution to the Construction Industry, By Country
7 Modular Construction Market, By Type (Page No. - 53)
7.1 Introduction
7.2 Permanent
7.3 Relocatable
8 Modular Construction Market, By Material (Page No. - 56)
8.1 Introduction
8.2 Precast Concrete
8.3 Steel
8.4 Wood
8.5 Plastic
8.6 Others
9 Modular Construction Market, By Module (Page No. - 60)
9.1 Introduction
9.2 Four-Sided Modules
9.3 Open-Sided Modules
9.4 Partially Open-Sided Modules
9.5 Mixed Modules and Floor Cassettes
9.6 Modules Supported By A Primary Structure
9.7 Others
10 Modular Construction Market, By End-Use Sector (Page No. - 62)
10.1 Introduction
10.2 Housing
10.3 Commercial
10.4 Healthcare
10.5 Education
10.6 Industrial
11 Modular Construction Market, By Region (Page No. - 66)
11.1 Introduction
11.2 Asia Pacific
11.2.1 China
11.2.2 Japan
11.2.3 Australia
11.2.4 India
11.2.5 Rest of Asia Pacific
11.3 Europe
11.3.1 Germany
11.3.2 Italy
11.3.3 France
11.3.4 UK
11.3.5 Russia
11.3.6 Sweden
11.3.7 Spain
11.3.8 Rest of Europe
11.4 North America
11.4.1 US
11.4.2 Canada
11.4.3 Mexico
11.5 Middle East
11.5.1 UAE
11.5.2 South Africa
11.5.3 Saudi Arabia
11.5.4 Rest of the Middle East & Africa
11.6 South America
11.6.1 Brazil
11.6.2 Argentina
11.6.3 Rest of South America
12 Competitive Landscape (Page No. - 101)
12.1 Overview
12.3 Market Ranking
12.4 Competitive Scenario
12.4.1 New Projects
12.4.2 Contracts, Partnerships, Agreements, and Joint Ventures
12.4.3 Expansions and Divestitures
12.4.4 Merger & Acquisitions
13 Company Profiles (Page No. - 108)
(Business Overview, Products Offered, Recent Developments, SWOT Analysis, MnM View)*
13.1 Laing O’rourke
13.2 Red Sea Housing
13.3 Atco
13.4 Bouygues Construction
13.5 Vinci
13.6 Skanska AB
13.7 Algeco Scotsman
13.8 Kleusberg GmbH & Co. Kg
13.9 Kef Katerra
13.10 Lendlease Corporation
13.11 Cimc Modular Building Systems Holding
13.12 Other Players
13.12.1 Modular Space Corporation
13.12.2 Dubox
13.12.3 Kwikspace Modular Buildings
13.12.4 Guerdon Enterprises LLC
13.12.5 Alta-Fab Structures
13.12.6 Westchester Modular Homes
13.12.7 Wernick Group
13.12.8 Fleetwood Australia
13.12.9 NRB Inc.
13.12.10 Koma Modular
13.12.11 Hickory Group
13.12.12 Clayton Homes
13.12.13 J.D. Irving
13.12.14 Horizon North Logistics
13.12.15 Art’s Way Manufacturing
*Details on Business Overview, Products Offered, Recent Developments, SWOT Analysis, MnM View Might Not Be Captured in Case of Unlisted Companies.
14 Appendix (Page No. - 144)
14.1 Discussion Guide
14.2 Knowledge Store: Marketsandmarkets Subscription Portal
14.3 Available Customizations
14.4 Related Reports
14.5 Author Details
List of Tables (90 Tables)
Table 1 USD Conversion Rates, 2014–2017
Table 2 Asia Pacific Urbanization Trend, 1990–2050
Table 3 North America: GDP, By Country, 2015–2022 (USD Billion)
Table 4 North America: Contribution of the Construction Industry to the GDP, By Country, 2014–2021 (USD Billion)
Table 5 Europe: GDP, By Country, 2015–2022 (USD Billion)
Table 6 Europe: Contribution of the Construction Industry to the GDP, By Country, 2014–2021 (USD Billion)
Table 7 Asia Pacific: GDP, By Country, 2015–2022 (USD Billion)
Table 8 Asia Pacific: Contribution of the Construction Industry to the GDP, By Country, 2014–2021 (USD Billion)
Table 9 Middle East & Africa: GDP, By Country, 2015–2022 (USD Billion)
Table 10 Middle East & Africa: Contribution of the Construction Industry to the GDP, By Country, 2014–2021 (USD Billion)
Table 11 South America: GDP, By Country, 2015–2022 (USD Billion)
Table 12 South America: Contribution of the Construction Industry to the GDP, By Country, 2014–2021 (USD Billion)
Table 13 Modular Construction Market Size, By Type, 2016–2023 (USD Billion)
Table 14 Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 15 Modular Construction Type Market Size, By Material, 2016–2023 (USD Billion)
Table 16 Modular Construction Type Market Size, By Material, 2016–2023 (Million Square Feet)
Table 17 Modular Construction Market Size, By End-Use Sector, 2016–2023 (USD Billion)
Table 18 Modular Construction Market Size, By End-Use Sector, 2016–2023 (Million Square Feet)
Table 19 Modular Construction Market Size, By Region, 2016–2023 (USD Billion)
Table 20 Modular Construction Market Size, By Region, 2016–2023 (Million Square Feet)
Table 21 Asia Pacific: Modular Construction Market Size, By Country, 2016–2023 (USD Million)
Table 22 Asia Pacific: Modular Construction Market Size, By Country, 2016–2023 (Million Square Feet)
Table 23 Asia Pacific: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 24 Asia Pacific: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 25 China: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 26 China: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 27 Japan: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 28 Japan: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 29 Australia: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 30 Australia: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 31 India: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 32 India: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 33 Rest of Asia Pacific: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 34 Rest of Asia Pacific: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 35 Europe: Modular Construction Market Size, By Country, 2016–2023 (USD Million)
Table 36 Europe: Modular Construction Market Size, By Country, 2016–2023 (Million Square Feet)
Table 37 Europe: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 38 Europe: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 39 Germany: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 40 Germany: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 41 Italy: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 42 Italy: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 43 France: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 44 France: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 45 UK: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 46 UK: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 47 Russia: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 48 Russia: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 49 Sweden: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 50 Sweden: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 51 Spain: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 52 Spain: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 53 Rest of Europe: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 54 Rest of Europe: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 55 North America: Modular Construction Market Size, By Country, 2016–2023 (USD Million)
Table 56 North America: Modular Construction Market Size, By Country, 2016–2023 (Million Square Feet)
Table 57 North America: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 58 North America: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 59 US: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 60 US: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 61 Canada: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 62 Canada: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 63 Mexico: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 64 Mexico: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 65 Middle East & Africa: Modular Construction Market Size, By Country, 2016–2023 (USD Million)
Table 66 Middle East & Africa: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 67 Middle East & Africa: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 68 Middle East & Africa: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 69 UAE: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 70 UAE: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 71 South Africa: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 72 South Africa: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 73 Saudi Arabia: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 74 Saudi Arabia: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 75 Rest of the Middle East & Africa: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 76 Rest of the Middle East & Africa: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 77 South America: Modular Construction Market Size, By Country, 2016–2023 (USD Million)
Table 78 South America: Modular Construction Market Size, By Country, 2016–2023 (Million Square Feet)
Table 79 South America: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 80 South America: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 81 Brazil: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 82 Brazil: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 83 Argentina: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 84 Argentina: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 85 Rest of South America: Modular Construction Market Size, By Type, 2016–2023 (USD Million)
Table 86 Rest of South America: Modular Construction Market Size, By Type, 2016–2023 (Million Square Feet)
Table 87 New Projects
Table 88 Contracts
Table 89 Expansions
Table 90 Merger & Acquisitions
List of Figures (36 Figures)
Figure 1 Modular Construction Market Segmentation
Figure 2 Modular Construction Market: Research Design
Figure 3 Market Size Estimation Methodology: Bottom-Up Approach
Figure 4 Market Size Estimation Methodology: Top-Down Approach
Figure 5 Modular Construction Market: Data Triangulation
Figure 6 Steel Segment to Be the Largest in the Modular Construction Market, By 2023
Figure 7 Modular Construction Market, By Type, is Estimated to Be Dominated By the Permanent Segment in 2018
Figure 8 Housing Sector Estimated to Lead the Modular Construction Market in 2018
Figure 9 Asia Pacific Dominated the Modular Construction Market in 2017
Figure 10 Market Growth is Attributed to Growth of the Construction Industry in Developing as Well as Matured Markets of Modular Construction
Figure 11 Permanent Buildings to Dominate the Modular Construction Market Through 2023
Figure 12 Steel as A Material for Modular Construction to Grow at the Highest CAGR During the Forecast Period
Figure 13 Housing Sector to Lead the Demand for Modular Construction Through 2023
Figure 14 China Accounted for the Largest Share in 2017
Figure 15 China is Projected to Grow at the Highest Rate From 2018 to 2023
Figure 16 Modular Construction Market: Drivers, Restraints, Opportunities, and Challenges
Figure 17 Global GDP Growth Trend, 2006–2017
Figure 18 Supply Chain Analysis
Figure 19 Porter’s Five Forces Analysis
Figure 20 Projected Per Capita GDP, By Country (USD Million)
Figure 21 Modular Construction Market Size, By Type, 2018 vs 2023 (USD Billion)
Figure 22 Modular Construction Market Size, By Material, 2018 vs 2023 (USD Billion)
Figure 23 Modular Construction Market Size, By End-Use Sector, 2018 vs 2023 (USD Billion)
Figure 24 Regional Snapshot: China is Projected to Be the Fastest-Growing Country-Level Market From 2018 to 2023
Figure 25 Asia Pacific: Modular Construction Market Snapshot
Figure 26 Europe: Modular Construction Market Snapshot
Figure 27 Companies Adopted Various Growth Strategies From 2017 to 2018
Figure 28 Market Ranking of Key Players, 2017
Figure 29 Laing O’rourke: Company Snapshot
Figure 30 Red Sea Housing: Company Snapshot
Figure 31 Atco: Company Snapshot
Figure 32 Bouygues Construction: Company Snapshot
Figure 33 Vinci: Company Snapshot
Figure 34 Skanska AB: Company Snapshot
Figure 35 Algeco Scotsman: Company Snapshot
Figure 36 Lendlease Corporation: Company Snapshot
MarketsandMarkets projects that the modular construction market will grow from USD 112.42 billion in 2018 to USD 157.19 billion by 2023, at a CAGR of 6.9%. Growth in infrastructure investment and industrialization, ease of installation and relocation, and the demand for affordable housing drive the growth of the modular construction market. The housing segment is projected to account for a larger share through 2023. The cost-effectiveness and time-saving characteristics of this technology have contributed toward its use for developing buildings. Furthermore, it offers numerous benefits in terms of quality control, faster build times, greater flexibility and reuse, cost savings, and environmental benefits.
The segmentation for this report is based on type, material, module, end-use sector, and region. Housing is projected to be the fastest-growing end-use sector segment of the modular construction market. In this sector, the demand for modular construction is expected to be driven by the demand for affordable housing with time-saving characteristics. Countries are turning toward the adoption of modular construction methods to meet the rising demand for housing that is eco-friendly and cost-effective due to efficient in-factory processes and reduced waste.
By material, the market has been segmented into steel, precast concrete, wood, plastic, and others. Each material differs from others on the basis of advantages and limitations. In 2017, steel accounted for the largest share of the modular construction market. Design flexibility, strength, structural integrity, durability, security and fire resistance, and reduced need for repairs and maintenance throughout a building’s life have contributed toward the extensive use of steel in modular construction.
Permanent modular construction dominated the market in 2017, in terms of value, as a result of the rising need for affordable houses, coupled with the high-quality control in comparison to on-site construction. Permanent modular construction is widely employed in numerous sectors, including residential, office and administrative spaces, K-12 education, retail and hospitality, healthcare, higher education student housing, and publicly-funded facilities.
Asia Pacific dominated the modular construction market in 2017, in terms of value. China contributes a major share to the Asia Pacific modular construction market. Increasing urbanization, increasing demand for buildings at affordable costs, and favorable policies and plans are driving the demand for modular construction in the region. Chinese prefabrication manufacturers are further collaborating with global manufacturers to solve their crisis for houses. For instance, UK’s Your Housing Group signed a deal of USD 2.77 billion with the state-owned China National Building Material Company. Under this project, 25,000 new homes would be constructed over the next five years.
Asia Pacific is also projected to be the fastest-growing market for modular construction from 2018 to 2023. The growing demand for better quality construction, shorter construction time, and a safer working environment are some of the factors that are expected to boost the growth of the modular construction market in the region.
Lack of awareness about modular construction and volatility in the transportation charges are the key challenges in the growth of the modular construction market. The global modular construction market is dominated by players such as Laing O’Rourke (UK), Red Sea Housing (Saudi Arabia), ATCO (Canada), Bouygues Construction (France), VINCI (France), Skanska AB (Sweden), Algeco Scotsman (US), KLEUSBERG GmbH & Co. KG (Germany), KEF Katerra (India), and Lendlease Corporation (Australia).
Opportunities
Increase in population and rapid urbanization translating to a large number of new construction projects
The ever-increasing population as well as industrial boom after the economic slowdown has given rise to new constructions, both commercial and residential. Moreover, the migration of rural population to urban areas and the conversion of towns into cities have further fueled the growth rate. According to the Population Reference Bureau, China, India, and other Asia Pacific countries accounted for a combined population exceeding 4.1 billion in 2016, while the Asia-Pacific Human Development Report published by United Nations Development Programme, projects that the total population in Asia Pacific to reach 4.84 billion by 2050, of which 64% is projected to be urban population. This is expected to rise demand for new construction projects, over the next two decades, owing to rapidly rising household incomes and the growing middle-class population. Asia Pacific is projected to witness the highest number of new constructions between 2017 and 2022. The construction spending during this period in China is expected to be 7.3%, by 2020; for India, it is expected to be 7%; while for Vietnam, it is expected to be 6.8% of the global construction spending, according to Asia Construction Outlook survey conducted by AECOM (US). The positive change in living standards and rapid urbanization are expected to shift the inclination of the suppliers and consumers toward modular construction.
Multinationals adopting modular construction
Multinational construction companies have started turning to modular construction to get the projects done owing to its superior benefits in terms of quality control, cost savings, faster build times, and environmental benefits. Quality control is the prime factor that have contributed towards the rising adoption of modular construction by construction companies. Unlike conventional construction techniques, modular structures are built in a factory-controlled environments which eliminates the chances for high levels of moisture being trapped in the new construction and reduces imperfections like lumber warp. Furthermore, modular construction has faster build times which directly reduces build times, due to elimination of weather delays which allows contractors to complete daily build goals. This helps the company to encash the buildings structures in comparatively less time. The increasing adoption of modular construction technique by construction companies creates an opportunity for the growth of modular construction market in the coming years.
Challenges
Lack of awareness
The construction industry is considered to be slow and conservative in adopting innovative and new technologies. The construction sector comprises numerous small suppliers; its R&D budget is also limited in comparison to other sectors. Modular construction market has a positive outlook due to high growth in the construction industry. However, in some developing or underdeveloped countries of the Asia Pacific region as well as in Africa and South America, people are less aware of this construction method and the benefits it offers. People perceive modular buildings to have a shorter life or unable to sustain natural calamities. There is also lack of awareness about the recyclability of modular buildings in the emerging economies in Africa and South America. For the growth of this industry, it is important to educate customers regarding the positive effects of modular construction on the environment and the way it can contribute to a healthy lifestyle.
Volatility in transportation charges can create an unpredictable business environment
The modular construction industry relies heavily on carriage facilities for the transportation of raw materials from the supplier and to move the modules from the factory to the site of installation. As long as the transportation is available at a reasonable price, the production can be carried out smoothly. However, transportation charges are highly volatile. If the prices rise, the cost of the overall production also increases, as it not only increases the transportation cost of the modules but also raises the raw material cost for the manufacturer, which results in inflated prices of modular buildings for the end users. Thus, volatility in transportation charges leads to an unpredictable business environment in modular construction market.
Competitive Landscape
New Projects
|
Date |
Company Name |
Developments |
|
2018 |
KLEUSBERG GmbH & Co. KG |
KLEUSBERG is creating a 4-storey new building for Medius KLINIK OSTFILDERN-RUIT at Ostfilder Klinikum, Esslingen, Germany. The construction work for 2,750 m² bed ward is expected to begin in September this year and schedule to complete by February 2019. The project will build by modular construction method. |
|
2018 |
KLEUSBERG GmbH & Co. KG |
KLEUSBERG is developing a new office building at Bielefeld University. In this project, 120 additional offices for their staff and professors will be created by using both conventional reinforced concrete construction method and modular construction method. |
Source: Press Releases
Contracts
|
Date |
Company Name |
Developments |
|
May 2018 |
Laing O’Rourke |
SunSHIFT, a subsidiary of Laing O’Rourke entered into a new contract with EDL (Energy Developments Pty Ltd) in order to build hybrid gas-fired power station along with three megawatt PV installation for South32 at its Cannington mine in North Queensland, Australia. The solar PV facility will be constructed offsite by the company via modular construction method and is expected to be operational in September 2018. |
|
March 2018 |
Bouygues Construction |
Dragages Singapore (Subsidiary of Bouygues Construction) received the contract from Perumal Development Pte Ltd. i.e. a subsidiary of Low Keng Huat (Singapore) in order to design as well as build a mixed-used development (includes 240 units of serviced-apartments, 116 units of flats, 500 square meter of commercial space, and two levels of car park) on Perumal Road. |
Source: Press Releases
Expansions
|
Date |
Company Name |
Developments |
|
February 2018 |
KEF Infra |
KEF Infra plans to open an offsite manufacturing facility in Hyderabad, India with the aim to capitalize the rising demand for its residential and commercial buildings across sectors. Along with it, the company has also planned to set up two more plants in NCR and Mumbai with a total investment of USD 90.99 million and will have a production capacity of 6.5 million square feet of the construction space. |
|
September 2017 |
Laing O’Rourke |
Laing O’Rourke opened new Northern HQ at City Gate in South Manchester, England. The new corporate office reflects company’s current operating requirements as well as the regional spread of hundreds of staff. The new office serves as a corporate hub for numerous local project teams that are based on site. |
Source: Press Releases and Company News
Partnerships & Agreements
|
Date |
Company Name |
Developments |
|
February 2018 |
Laing O’Rourke |
Stanhope plc, Network Homes, and Laing O’Rourke have entered into a long-term partnership to help in solving the UK’s housing crisis by managing and delivering precision-engineered homes across the South East. The deal includes the construction of 550 new homes in Southall, Ealing, England and was valued USD 274.7 million. The project is expected to start in early 2019 and is projected to be completed by mid-2021. |
|
December 2017 |
ATCO |
ATCO Ltd. and its subsidiary named Canadian Utilities Limited entered into an agreement to transfer latter company’s 24.5 per cent ownership stake in ATCO Structures & Logistics Ltd. to ATCO Ltd. This agreement resulted in ATCO’s complete ownership in ATCO Structures & Logistics. |
Source: Press Releases
Acquisitions
|
Date |
Company Name |
Developments |
|
July 2018 |
Bouygues Construction |
Bouygues Construction acquired AW Edwards Pty Limited (Australia) to strengthen its position in the construction market. The acquired company will be the part of Bouygues Bâtiment International. |
|
December 2017 |
Algeco Scotsman |
Algeco Group’s subsidiary named Target Logistics acquired Iron Horse Ranch (US) in order to strengthen its position as the single largest turnkey workforce housing provider in the US, comprising a network of eight lodges as well as 2,119 beds in the Permian Basin. |
Source: Press Releases
Divestitures
|
Date |
Company Name |
Developments |
|
November 2017 |
Algeco Scotsman |
Algeco Group sold its North American modular space and portable storage operations to Williams Scotsman Holdings Corp. (subsidiary of WillScot Corporation). The transaction was valued USD $1.1 billion. |
|
July 2017 |
Laing O’Rourke |
Laing O’Rourke sold its Bison i.e. hollowcore and structural precast business to building products company named Forterra (US). In addition to this transfer of ownership, the agreement included an exclusive partnership between Laing O’Rourke and Forterra, where the former company continues to deploy Bison products for its projects and agreed to a continued sharing of product development and innovation. |
Source: Press Releases and Company News
Mergers/Joint Ventures
|
Date |
Company Name |
Developments |
|
June 2018 |
KEF Infra |
KEF Infra enter into a strategic merger with Katerra (US) i.e. a technology company focused towards revolutionizing design and construction industries. The partnership between the companies expanded their manufacturing capacity, geographical reach, and market expertise. The partnership firm is named as KEF Katerra. |
|
June 2015 |
Laing O’Rourke |
Laing O’Rourke entered into a joint venture with FCC Construction (Spain) and J. Murphy & Sons Limited (UK), one of the leading construction and engineering companies in Europe, to bid for HS2 high-speed rail scheme, one of the largest infrastructure projects in the UK. The joint venture would bring together the experience and expertise of these three companies in the areas of tunneling and station development and delivery. |
Source: Press Releases and Company News
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