Global Modular Construction Market Outlook Report - Market Size, Share Analysis and Forecast (2024-2032)

Global Modular Construction Market Growth

The demand for affordable housing, particularly in urban areas coupled with the industrialisation of the construction process, has been and will continue to be a key driver for growth of the global modular construction industry. It is gaining attraction among residential as well as commercial sectors as it can adhere to stringent timelines with no compromise on quality of construction.

In addition, the modular construction dynamics and trends are also impacted by some of the government initiatives, which are expected to decline the housing shortfall in countries as that of U.S., China, and India. Furthermore, modular construction industry revenue is also benefitting from the increasing sustainability trend. In many cases, sustainable goals can be easily achieved through these practices as it consumes less energy, generate less waste material and generally uses environmentally friendly & recyclable materials which are increasingly becoming a need for today’s construction.

Technologies such as 3D printing and Building Information Modeling (BIM) are already revolutionising modular construction, improving design precision, reducing construction errors, and increasing collaboration between architects and contractors. Europe along with North America are witnessing investments being made in modular technology, to counter labor shortages and escalating costs of construction.

Additionally, popularity of smart city projects in ASEAN countries is likely to push the modular construction market growth. Countries like India, Indonesia, China are increasingly adopting productive construction technology to meet the growing need for affordable home in such countries. These smart city projects are likely to aim at providing affordable housing for the growing urban population. Thus, growing population followed by increasing need for fast and affordable housing solutions is anticipated to drive the modular construction industry growth.

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Global Modular Construction Market Analysis

The demand for Modular construction market has become increasingly popular in recent years, driven by the growing recognition of the benefits the methodology offers: faster project delivery, reduced labor requirements and site disruption. Commercially, modular construction is predominantly used for hospital, school and hotel projects where flexibility combined with speed are critical. Meanwhile, temporary structures also heavily rely on modular thinking due to their inherent adaptability and portability.

The residential sector is witnessing an increasing demand for modular construction market revenue as it provides a promising solution to the housing shortage, especially in the cities. With the mounting need for houses, regulators and builders have begun to opt for modular construction to hasten their housing projects. The governments such as in the UK, Germany and the Netherlands has taken up initiatives to encourage utilisation of modular construction methods to combat the housing shortage.

In geography, Asia-Pacific leads the market share for modular construction industry due to fast urbanisation and industrialisation in countries including China, India, and Japan. North America is also anticipated to witness a substantial growth over the forecast period due to increasing adoption in residential as well as commercial sectors. The popularity of green building solutions coupled with energy-efficient construction has elevated the modular construction market in the region. This has paved new opportunities for modular construction market demand growth.

Modular construction housings and complexes are starting to be considered as a solution for disaster relief and emergency housing. In the aftermath of natural disasters like hurricanes or earthquakes, modular buildings are quick to deploy, cost-effective and an efficient form of shelter. Also, the use of modular construction is increasing in healthcare facilities.

Modular Construction Industry Outlook

The fast growth pace of the construction sector, particularly in residential and commercial housing sectors is expected to offer growth opportunities for the modular construction market. Meanwhile, global construction industry was valued at USD 8.9 trillion in 2023 and the USA construction sector was valued at the USD 1.8 trillion in 2023. It is projected that China; India and the United States will account for 50% of the total global construction spending which will reach nearly USD 14.5 trillion by 2024.

Furthermore, governments, globally, are increasingly realizing modular construction as a tool to address the urban housing crisis. The increasing focus on affordable housing, especially in the cities witnessing rapid growth, is expected to further propel investments in the space. For instance, China has witnessed massive demand for housing owing to urbanization, due to which the government has implemented policies promoting the use of modular technology to cater to this demand. As of 2023, China’s urbanisation rate stood at 66.2%, and it is expected to reach 75–80% by 2035, which is anticipated to increase the demand for modular construction in China.

Europe is likely to offer attractive opportunities for modular construction market during the forecast period. Stringent environmental regulations have made it mandatory for construction companies to adopt sustainable construction practices in Europe. The construction industry contributes nearly 9% of the EU’s GDP. It employs directly over 18 million people and indirectly supports further over 24.2 million jobs. The industry is composed of approximately 5.3 million enterprises, more than 99% of which are small and medium-sized enterprises (SMEs). Also, a total of 35 million buildings needs to be renovated by 2030.

Commercial sector is expected to continue to drive the demand in modular construction market value as hospital expansions and the construction of temporary healthcare facilities leverage modularization for effective addressing of capacity issues. In March 2023, spending on construction climbed 3.8% from a year ago, as per data released by the Census Bureau (US), driven by an increase in commercial building. Currently valued at USD 2.3 trillion, the commercial construction sector is expected to continue its expansion with a projected growth rate of 5.9% by 2030, signalling sustained upward momentum in the coming years.

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Global Modular Construction Industry Segmentation

“Global Modular Construction Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Permanent Modular
• Relocatable Modular

Market Breakup by Material

• Steel
• Concrete
• Wood
• Plastic

Market Breakup by End Use

• Commercial
• Industrial/Institutional
• Residential

Market Breakup by Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

Key Players in the Modular Construction Market and Their Key Initiatives

Laing O'Rourke

• The company specializes in off-site fabrication and digital engineering for large infrastructure and building projects.
• In 2023, Laing O’Rourke collaborated with Kone and designed a modular elevator system to combat onsite installation time.

Larsen & Toubro Ltd

• A leader in modular construction, Laing O'Rourke specializes in off-site fabrication and digital engineering for large infrastructure and building projects.
• In 2022, the company constructed 7-storey Flight Control System (FCS) Integration Facility for the Defence Research and Development Organization using Integrated Hybrid Modular Construction Technology.

Bouygues Construction

• The company focuses on sustainable modular solutions for both residential and commercial applications, including smart cities and affordable housing.
• In 2022, Bouygues, completed 491 bedrooms of student accommodation modular project at The Riverside, UK.

Leading Companies in the Modular Construction Market

The companies specialise in innovative off-site manufacturing, digital engineering, and sustainable modular solutions for residential and commercial projects.

• Bouygues Construction
• Balfour Beatty plc
• Larsen & Toubro Ltd
• Laing O'Rourke
• Katerra

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Regional Insights

The market is dominated by Asia-Pacific region. China is the largest market in the region and is also projected to be fastest-growing market followed by India and Japan. Urbanisation has been rapid in this region, leading to an increased need for more affordable housing solutions. Additionally, governments in these countries are increasingly investing in major modular construction projects as a solution to the lack of available housing and to promote greener building practices. Additionally, the growing population followed by their need for affordable accommodation is likely to increase demand for modular construction market.

Another important region where the modular construction industry revenue is flourishing is North America. The adoption of modular construction in both residential and commercial sectors in North America have been increasing, with the use of modular methods for building healthcare facilities, hotels and educational institutes gaining traction in the U.S. With a view to attain green building certifications and increasing focus towards energy efficient construction practices has also been driving this market. In Canada, growing trend for affordable home coupled with government effort for ensuring the deployment of productive construction methods is pushing the demand growth of modular construction market.

Europe is witnessing significant growth owing to environmental regulations coupled with the necessity for energy-efficient and sustainable buildings. U.K., Germany, and Sweden are increasingly adopting modular construction to cater to the increasing demand for residential and commercial buildings, particularly in densely populated urban areas where space is at a premium.

In Middle East and Africa, growing construction projects in UAE and Saudi Arabia are expected to open promising opportunities for the demand for modular construction market. Additionally, growing sustainable construction methods is also likely to speed up the modular construction market growth.

Modular Construction Market Report Snapshots

Modular Construction Market Size

Modular Construction Market Growth

Modular Construction Companies