Modular Construction Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The modular construction market was valued at more than USD 40 billion in 2021, and the market is projected to register a CAGR of over 8% during the forecast period (2022-2027).

Modular construction is the use of pre-engineered building units that are delivered to the construction sites and assembled as large volumetric components of a building. Modular construction takes most of the construction phase away from the building site. The surging demand for hospitals and patient bed facilities based on modular construction significantly increased during the peak of the pandemic as this type of construction needs a significantly less amount of completion time. Such modular constructions during the pandemic, globally, stimulated the demand in the market studied.

• Rising 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.
• In the construction industry, the permanent modular segment accounted for the largest share, and by material, the steel segment accounted for the largest share.
• The construction industry has been exploring innovative materials and technologies that can provide more high-quality housing using less construction time. On this basis, modular construction is one of the prominent sectors seeking lean techniques to improve overall operational workflows in providing housing with enhanced quality, productivity, safety, and efficiency.

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 15 countries across the 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.
• The increasing demand for modular construction in Asia-Pacific is moving much of the construction process from the building site into factories. "While countries like China, Japan, Singapore, and Australia are increasingly adopting modular buildings to meet labor and housing shortages, increase in industrialization, rising urbanized population, rising demand for eco-friendly and sustainable construction and government support.​"
• Government initiatives to reduce waste and promote green construction and building techniques is driving the demand for modular construction. For example: Singapore has mandated elements of prefabricated, pre-finished, and volumetric construction (PPVC) for all the projects on the government’s land. This is backed with subsidies for companies that participate with the aim of increasing and standardizing modern methods of construction (MMC) in the country, thereby increasing the demand for off-site construction.​​
• In August 2021, Shenzhen announced its project to expand the campus of three local schools, with an estimated investment of CNY 1100 million. Approximately 194,000 square meters of new school buildings will be built in steel structures by August 2022.
• Therefore, the above factors are expected to have a significant impact on the market in the coming years.

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