Modular Construction Market Size to Reach USD 169.84 Billion, With a CAGR of 6.57% CAGR by 2032

Modular Construction Market

The modular construction market is experiencing a period of rapid growth, driven by increasing demand for efficient, sustainable, and cost-effective building solutions.

Modular Construction Market Size was valued at USD 96.57 Billion in 2023. The Modular Construction industry is projected to grow from USD 102.05 Billion in 2024 to USD 169.84 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.57% during the forecast period (2024 – 2032)

Key Drivers of Market Growth

1. Speed and Efficiency: One of the most significant advantages of modular construction is the reduction in construction time. Since modules are manufactured simultaneously with site preparation, projects can be completed 30-50% faster than traditional construction methods. This speed is particularly beneficial for sectors such as healthcare and education, where rapid deployment of facilities is often required.
2. Cost Savings: Modular construction can lead to substantial cost savings due to reduced labor costs, minimized material waste, and lower financing costs associated with shorter project timelines. Additionally, the controlled factory environment allows for better inventory management and bulk purchasing of materials, further reducing expenses.
3. Sustainability: The modular construction process generates less waste compared to traditional construction, as materials are precisely measured and cut in the factory. Moreover, the ability to reuse and relocate modular buildings contributes to a circular economy, reducing the environmental impact of construction activities. As sustainability becomes a priority for governments and corporations worldwide, modular construction is gaining traction as an eco-friendly alternative.
4. Quality Control: Factory-based production ensures consistent quality and adherence to building codes and standards. The controlled environment minimizes the risk of weather-related delays and damage, resulting in higher-quality structures. Additionally, the use of advanced technologies such as Building Information Modeling (BIM) and computer-aided design (CAD) enhances precision and reduces errors during the manufacturing process.
5. Labor Shortages: The construction industry is grappling with a shortage of skilled labor, particularly in developed countries. Modular construction mitigates this issue by requiring fewer on-site workers and allowing for the use of semi-skilled labor in factory settings. This shift not only addresses labor shortages but also improves worker safety by reducing exposure to hazardous on-site conditions.

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Modular Construction Market Segment Insights

The Modular Construction Market segmentation, based on material type, includes Concrete, Steel, Plastic, Wood and Others.

Concrete, Steel, Plastic, Wood, and others are among the material types included in the segmentation of the modular construction market. The steel segment grew to be the largest in 2021, accounting for a maximum share of over 41.60 percent of total sales. It is used in many different shapes, such as columns, angles, I- and T-shaped beams, columns, and H-type beams.

Relocatable and permanent structures are included in the segmentation of the modular construction market, in terms of the type. Permanent modular buildings dominated the market in 2021 and produced more than 63.90% of the whole revenue. Additionally, the years 2024 to 2032 are predicted to see the fastest growth. It offers better quality control than building done on-site. These modules can be developed independently or merged into an existing structure.

The top products covered in the MRFR study are columns & beams, roofs & floors, walls, and others. In 2021, the market was led by roof and floor construction, which generated more than 43.90% of total sales. It is also anticipated to develop most quickly between 2024 and 2032.

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Company News and Innovations

Several companies are leading the charge in the modular construction market, driving innovation and expanding their market presence. Here are some notable developments:

Skanska AB: A leading construction and development company, Skanska has been at the forefront of modular construction in Europe and North America. In 2022, Skanska announced the completion of a modular housing project in Sweden, delivering 200 apartments in just 12 months. The company has also invested in digital tools such as BIM and 3D printing to enhance the efficiency and accuracy of its modular construction processes.

Laing O’Rourke: The UK-based construction firm has made significant strides in modular construction, particularly in the healthcare sector. In 2023, Laing O’Rourke completed a state-of-the-art modular hospital in the UK, reducing construction time by 40% compared to traditional methods. The company has also partnered with technology providers to integrate robotics and automation into its modular manufacturing facilities.

Katerra: Although Katerra filed for bankruptcy in 2021, its impact on the modular construction market remains significant. The company pioneered the use of technology in modular construction, leveraging software platforms to streamline design, manufacturing, and logistics. Katerra’s legacy continues to inspire other companies to adopt similar approaches, driving innovation in the industry.

Guerdon Modular Buildings: A leading modular construction company in the United States, Guerdon specializes in multi-family housing, healthcare, and education facilities. In 2023, Guerdon announced the completion of a 200-unit modular apartment complex in California, delivered in just 10 months. The company has also expanded its operations to include modular construction for data centers, catering to the growing demand for digital infrastructure.

Bouygues Construction: The French construction giant has been actively investing in modular construction to address housing shortages and promote sustainable building practices. In 2022, Bouygues completed a modular student housing project in Paris, featuring energy-efficient designs and renewable energy systems. The company is also exploring the use of recycled materials in its modular construction processes to further reduce its environmental footprint.

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