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

The Modular Construction Market is segmented by Construction (Permanent Modular and Relocatable Modular), Material (Steel, Concrete, Wood, and Plastic), End-user Industry (Commercial, Industrial/Institutional, and Residential), and Geography (Asia-Pacific, North America, Europe, South America, Middle-East and Africa). The report offers market size and forecasts for Modular Construction in revenue (USD million) for all the above segments.

Market Snapshot

Modular Construction Market - Market Summary
Study Period:

2016-2026

Base Year:

2020

Fastest Growing Market:

Asia Pacific

Largest Market:

Asia Pacific

CAGR:

>12 %

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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 led to a decrease in the modular construction works at the different construction segments including educational, residential, airports, and others, which in turn 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 very less amount of completion time. For example, in China, during the COVID-19 pandemic, the government had made coronavirus emergency hospitals with modular construction including a 1,000-bed Huoshenshan hospital within 10 days and a 1,600-bed Leishenshan hospital within 12 days in the Wuhan city. Such modular constructions during the pandemic across the globe had 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 modelling (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, which 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 that are 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 on the basis of revenue (USD million).

Construction
Permanent Modular
Relocatable Modular
Material
Steel
Concrete
Wood
Plastic
End-user Industry
Commercial
Industrial / Institutional
Residential
Geography
Asia Pacific
China
India
Japan
South Korea
Rest of Asia-Pacific
North America
United States
Canada
Mexico
Europe
Germany
United Kingdom
France
Russia
Spain
Rest of Europe
South America
Brazil
Argentina
Rest of South America
Middle-East and Africa
Saudi Arabia
South Africa
Rest of Middle-East and Africa

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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 to be 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 ‘Nonresidential 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. On an optimistic note, construction of office spaces is, however, expected to increase by 0.5% in 2020 and further by 3% in 2021.
  • Furthermore, cities like New York is quickly becoming a home for some of the most ambitious modular hotels in the world, 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 will 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 aforementioned factors are expected to show significant impact on the market in the coming years.
Modular Construction Market - Segmentation

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Asia-Pacific Region to Dominate the Market

  • In Asia-Pacific, China is the largest economy in terms of GDP. The country witnessed about 6.1% growth in its GDP during 2019, even after the trade disturbance caused due to its trade war with the United States. The economic growth rate of China in 2020 was initially expected to be moderate as compared to the previous year. However, due to the onset of COVID-19, the economic growth of China now seems to contract to a considerable extent in 2020. According to the International Monetary Fund (IMF) projections, the Chinese GDP growth declined to 1.9% in 2020, due to the COVID-19 outbreak in the country. It is expected to recover and reach 8.2% by the end of 2021. 
  • The Chinese government rolled out massive construction plans, including making provisions for the movement of 250 million people to its new megacities, over the next ten years, despite the efforts to rebalance its economy to a more service-oriented form.
  • China is promoting and undergoing a process of continuous urbanization, with a 60% rate targeted by end-2020. The increased living spaces required in the urban areas resulting from urbanization and the desire of middle-class urban residents to improve their living conditions will have a profound effect on the housing market, and thereby increase the usage of modular construction.
  • The country has the largest building market in the world, making up 20% of all construction investment globally. The country alone is expected to spend nearly USD 13 trillion on buildings by 2030, which is expected to stimulate the demand for the modular construction market.
  • Furthermore, in India, the demand for modular construction has been growing in recent times. The Smart City initiative by government also boosting the demand for modular construction in the country.
    • Katerra, a modular construction manufacturer in India completed almost 40 projects in last two years. One of its biggest project includes Lulu Group’s two-million-square-feet and half a kilometre-long mall in Lucknow, inaugurated in October 2019.
    • Investments of USD 31,650 billion has been proposed by 99 cities under their smart cities plan. 100 smart cities and 500 cities are likely to invite investments worth INR 2 trillion in the next 5 years.
  • Thus, the aforementioned factors are expected to boost the demand for the modular construction market in the region in the coming years.
Modular Construction Market - Regional Trend

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Competitive Landscape

The global modular construction market is highly fragmented, with no player holding a significant share to influence the market. Some of the key players in the modular construction market include Katerra, Skanska, Bouygues Construction, Balfour Beatty, and TAISEI CORPORATION, among others.

Recent Developments

  • In January 2021, Etex Group has announced the acquisition of a majority stake in France-based offsite construction company e-Loft which provides solutions in three different modular domains including single-family modular homes, modular multi-family residential complexes, and 3D wood technology-based custom-designed buildings, which is likely to enhance the company's modular construction business.
  • In January 2020, Balfour Beatty completed the acquisition of two residential community developments including Paces Brook in Columbia of South Carolina and Retreat at Schillinger in Alabama of the United States in a multifamily property deal in partnership with ApexOne Investment Partners, thus extending the company's multifamily portfolio by the addition of 530 residential units.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Introduction to Market Drivers and Restraints

    3. 4.3 Drivers

      1. 4.3.1 Increasing Demand from the Construction Industries in Asia-Pacific Countries

      2. 4.3.2 Time and Cost-Effective Method of Construction

      3. 4.3.3 Lower Defects And Rework

    4. 4.4 Market Restraints

      1. 4.4.1 High Cost of Logistics

      2. 4.4.2 Impact of COVID-19 Outbreak

    5. 4.5 Industry Value Chain Analysis

    6. 4.6 Porter's Five Forces Analysis

      1. 4.6.1 Bargaining Power of Suppliers

      2. 4.6.2 Bargaining Power of Consumers

      3. 4.6.3 Threat of New Entrants

      4. 4.6.4 Threat of Substitute Products and Services

      5. 4.6.5 Degree of Competition

    7. 4.7 Production Process

    8. 4.8 Regulatory Policy Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 Construction

      1. 5.1.1 Permanent Modular

      2. 5.1.2 Relocatable Modular

    2. 5.2 Material

      1. 5.2.1 Steel

      2. 5.2.2 Concrete

      3. 5.2.3 Wood

      4. 5.2.4 Plastic

    3. 5.3 End-user Industry

      1. 5.3.1 Commercial

      2. 5.3.2 Industrial / Institutional

      3. 5.3.3 Residential

    4. 5.4 Geography

      1. 5.4.1 Asia Pacific

        1. 5.4.1.1 China

        2. 5.4.1.2 India

        3. 5.4.1.3 Japan

        4. 5.4.1.4 South Korea

        5. 5.4.1.5 Rest of Asia-Pacific

      2. 5.4.2 North America

        1. 5.4.2.1 United States

        2. 5.4.2.2 Canada

        3. 5.4.2.3 Mexico

      3. 5.4.3 Europe

        1. 5.4.3.1 Germany

        2. 5.4.3.2 United Kingdom

        3. 5.4.3.3 France

        4. 5.4.3.4 Russia

        5. 5.4.3.5 Spain

        6. 5.4.3.6 Rest of Europe

      4. 5.4.4 South America

        1. 5.4.4.1 Brazil

        2. 5.4.4.2 Argentina

        3. 5.4.4.3 Rest of South America

      5. 5.4.5 Middle-East and Africa

        1. 5.4.5.1 Saudi Arabia

        2. 5.4.5.2 South Africa

        3. 5.4.5.3 Rest of Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Colaborations and Agreements

    2. 6.2 Market Ranking Analysis

    3. 6.3 Strategies Adopted by Leading Players

    4. 6.4 Company Profiles

      1. 6.4.1 ACS, Actividades de Construccion y Servicios, S.A.

      2. 6.4.2 Balfour Beatty

      3. 6.4.3 Bouygues Construction

      4. 6.4.4 Etex Group

      5. 6.4.5 Guerdon, LLC.

      6. 6.4.6 JL Construction

      7. 6.4.7 Julius Berger Nigeria Plc.

      8. 6.4.8 Katerra

      9. 6.4.9 Kiewit Corporation

      10. 6.4.10 LAING O'ROURKE

      11. 6.4.11 LARSEN & TOUBRO LIMITED

      12. 6.4.12 Palomar Modular Buildings

      13. 6.4.13 RED SEA INTERNATIONAL

      14. 6.4.14 Skanska

      15. 6.4.15 System House R & C Co., Ltd.

      16. 6.4.16 TAISEI CORPORATION

    5. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

    1. 7.1 Implementation of Building Information Modelling (BIM)

**Subject to Availability

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Frequently Asked Questions

The Modular Construction Market market is studied from 2016 - 2026.

The Modular Construction Market is growing at a CAGR of >12% over the next 5 years.

The Modular Construction Market is valued at 44471 Million USD in 2016.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

Asia Pacific holds highest share in 2020.

  • Katerra
  • Skanska
  • Bouygues Construction
  • Balfour Beatty
  • TAISEI CORPORATION

Are the major companies operating in Modular Construction Market.

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