Europe Modular Construction Industry Size

the report "Europe Modular Construction Market by Material (Wood, Steel, Concrete), By End-Use Industry (Residential, Office Education, Retail & Commercial, Hospitality, Healthcare), and Region – Forecast to 2030" is projected to grow from USD 33.70 billion in 2025 and to reach USD 43.99 billion by 2030, at a Compound Annual Growth Rate (CAGR) of 5.39% during the forecast period.

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The modular construction market in Europe has been growing rapidly to meet demands for quick, affordable, and greener building solutions across homes, offices, and public projects. Its growth factors include accelerating urbanization, labor shortages, increasing environmental restrictions, and pressure to reduce the duration of construction work. Poland, Germany, and the UK are gaining a stronger foothold, supported by government initiatives favoring energy-efficient and prefabricated building techniques. For example, Poland's housing shortage stands at approximately 1.5 million units, which boosts the attraction to modular living solutions. In Germany, offsite construction is easing both housing and worker bottlenecks, as approximately 26.1% of new single and two-family homes in 2024 were built using prefabricated methods (Source: Built Offsite). In Germany, prefabricated homes are increasingly adhering to national energy-efficiency standards, leveraging government incentives and sustainability initiatives. Their swift delivery and reduced labor needs render modular housing a viable choice for high-demand urban locales. Moreover, EU sustainability directives and construction regulations promote the utilization of prefabricated materials, while advancements in lightweight steel and concrete modules enhance efficiency and scalability, hence expediting market adoption. 

The steel segment is estimated to grow at the second-fastest CAGR during the forecast period.

The steel segment in the European modular construction market is expected to register the second-fastest growth rate during the forecast period. The main reason for this increase is the strength, durability, and versatility of steel. The nature of the material makes it ideal for modular structures, which require rapid assembly and long-term stability. As steel parts can be recycled to a very large extent, they are in line with strict sustainability and green building regulations prevailing in Europe, which again call for their greater use. Moreover, innovations in prefabricated steel modules and lightweight steel framing technologies have improved construction efficiency, decreased on-site labor demands, and shortened project durations. The increasing demand for modular projects in commercial, industrial, and residential sectors, especially in metropolitan areas, is fostering the expansion of steel-based modular building solutions throughout the region.

Residential is expected to be the second-fastest-growing end-use industry during the forecast period.

?In Europe, the residential segment is set to be the second-fastest-growing end-use sector in modular construction during the forecast period. The surge is ignited by a real shortage of traditional housing: EUROCONSTRUCT projects total dwellings completed across Europe to decline to approximately 1.46 million in 2025, from 1.55 million in 2024. Conventional housing development is being squeezed further still with the rise in construction costs, higher interest rates, and tighter financing. All that fuels demand for homes that can be built relatively cheaply and delivered fast, especially in densely populated urban areas. Modular residential units thus become the most suitable solution to this problem, as they allow for quicker construction, lower labor and material costs, and offer scalable solutions, thereby constituting a viable and eco-friendly way of addressing Europe’s housing shortage.

Poland is expected to be the second-fastest-growing region during the forecast period.

Poland is poised to be the second-fastest-growing region in Europe's modular construction market during the forecast period, driven by a significant housing shortage and increasing demand for speed and affordability in housing. Statistics Poland reports that the country had approximately 16 million dwellings in 2024. However, Poland still ranks among the lowest within the EU in terms of dwellings per capita, with approximately 420 homes per 1,000 residents, compared to the EU average of 517. The estimated housing shortage of Poland is approximately 1.5 million units; therefore, there is an increasing demand for efficient construction methods in Poland, particularly in the large metropolitan areas. Modular construction is becoming a realistic option to meet this demand because modular construction allows for a more rapid delivery of new housing, lowers the costs associated with the construction process, and offers modular construction companies the ability to scale up their production.

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