Modular Construction Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The global modular construction market was valued at USD 44,471.96 million in 2020, and the market is projected to register a CAGR of over 12% during the forecast period (2021-2026).

The market was negatively impacted by COVID-19 in 2020. Considering the pandemic scenario, the construction activities were on temporary halt during the lockdown, thus, leading to a decrease in the modular construction works at the different construction segments, including educational, residential, airports, and others, which negatively impacted the demand for the market studied. However, the demand for hospitals and patient bed facilities based on modular construction has been significantly increased during the peak of the pandemic as this type of construction needs a significantly less amount of completion time. For example, in China, during the COVID-19 pandemic, the government made COVID-19 emergency hospitals with modular construction, including a 1,000-bed Huoshenshan hospital within ten days and a 1,600-bed Leishenshan hospital within 12 days in the Wuhan city. Such modular constructions during the pandemic, globally, stimulated the demand for the market studied.

• Over the short term, the increasing demand from construction industries in countries of Asia Pacific and the time and cost-effectiveness of modular construction work with lower defects and reworks needed are expected to drive the market's growth. On the flip side, the high cost of logistics involved in modular construction is expected to hinder the growth of the market studied.
• By the construction industry, the permanent modular segment accounted for the largest share, and by material, the steel segment accounted for the largest share.
• Implementation of building information modeling (BIM) is projected to act as an opportunity for the market in the future.

Scope of the Report

Modular construction involves the delivery and assembling of pre-fabricated engineered building units at the construction site. The volumetric building modular units are usually in the form of highly serviced units, such as kitchens, toilets, complete rooms, or parts of a room. The construction process of modular buildings is faster than the conventional process, as it requires less time. Furthermore, other advantages associated with modular construction include greater flexibility, improved air quality, and reduced construction schedule. The modular construction market is segmented by construction, material, end-user industry, and geography. By construction, the market is segmented into permanent modular and relocatable modular. By material, the market is segmented into steel, concrete, wood, and plastic. By end-user industry, the market is segmented into commercial, industrial/institutional, and residential. The report also covers the market size and forecasts for the modular construction market in 16 countries across major regions. For each segment, the market sizing and forecasts have been done based on revenue (USD million).

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Key Market Trends

Increasing Demand from the Commercial Sector

• The commercial sector is the largest segment in the modular construction market. Commercial buildings are constructed using the modular construction process, in accordance with the International Building Code (IBC) or a version of a code modeled after the IBC and state regulations.
• In Asia Pacific, China is considered one of the leading countries in the construction of shopping centers. China’s shopping malls sector has enjoyed robust development over the recent years, and 7,000 more malls are estimated to be opened by 2025. The total number of malls (with a gross floor area over 10,000 sq. m and not operating on a strata-titled basis) in China’s top 30 cities is estimated to increase to 1,445 units in 2019, at an annual growth rate of 13%.
• Developers are investing billions of dollars into projects across China to reinvent the enclosed mall experience with dramatic spaces and a focus on consumers over goods.
• In the United States, according to the survey ‘Non-residential building spending to grow through 2020’ by the American Institute of Architects, the overall non-residential sector is expected to increase by 0.9% in 2020 and 1.5% in 2021. However, the construction of hotels is expected to dip by 1% in 2020 and 0.7% in 2021. However, on an optimistic note, the construction of office spaces is expected to increase by 0.5% in 2020 and further by 3% in 2021.
• Furthermore, cities like New York are quickly becoming home for some of the most ambitious modular hotels, globally, including the 168-room, 26-storey AC Marriott in Manhattan, which was likely to open in 2020, but was delayed due to pandemic situation.
• Additionally, Travis Kalanick, Uber co-founder, is currently looking at prospects to build a new fortune by investing in Habitas, a start-up that advertises itself as a ‘Club Med for Millennials’ and may use 3D technology to create hotels and resorts in fast-time. Habitas has already raised USD 20 million to grow its ‘3D printed hotel’ concept from its Mexico base to Asia, and the Middle-East and Africa.
• Therefore, the factors mentioned above are expected to show a significant impact on the market in the coming years.

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