Modular Construction Market - Forecast(2023 - 2028)

Overview

Modular Construction Market size is forecast to reach $172.4 billion by 2025, after growing at a CAGR of 7.44% during 2020-2025. The Modular Construction (Prefabricated Buildings) market is expected to grow at a significant rate owing to rise in demand for complex structures at affordable cost as well as rapid urbanization and industrialization.

Modular buildings are built to the same or higher specifications than typically built homes, also called prefabricated buildings or precision built homes or pre-engineered building. The construction process is known as permanent modular construction.

Report Coverage

The report: “Modular Construction Market – Forecast (2020-2025)”, by IndustryARC, covers an in-depth analysis of the following segments of the Modular Construction Industry.

Key Takeaways

North America dominates the Modular Construction market because of demand for relocatable and prefabricated buildings to be reused or repurposed multiple times and transported to different building sites.  

The government initiatives and regulations toward sustainability and green environment will also boost the modular construction market.

The housing segment will dominate the global market, owing to rising demand for smart homes and buildings, fuelled by rising disposable incomes from the middle class.

Construction - Segment Analysis

Permanent modular held the largest share in the Modular Construction market in 2019. Permanent modular has emerged as one of the key alternative to traditional building methods over the past few years. Permanent modular construction find its wide application in commercial and industrial sector. North America is one of the key region for the permanent modular construction because of increase in demand for smart construction. In U.S. permanent modular construction grew to 23,286 units in 2017, an increase of about 2.1% from 22,809 units in 2016 according to Deluxe Modular. Whereas in Canada nonresidential construction is fueling the growth of permanent modular.

Material – Segment Analysis

Precast Concrete based tapes are likely to gain high market as it offers durable solution with cost efficiency and high quality. Precast concrete are manufactured by industrial methods based on mass production in order to construct large number of buildings in short time at low cost. Compared to onsite cast concrete, precast concrete erection is faster and is less affected by adverse weather condition.

End Use - Segment Analysis

Residential sector accounts for the highest market share in the global market and is expected to grow with the CAGR of 8.04% over the forecast period from 2020 to 2025. The growth can be attributed to an increase in residential housing construction activities with burgeoning population, rapid urbanization, and strong economic growth. Prefabricated housing has achieved a sustainable foothold across globe. When using modular construction (prefabricated building) 66% of building professionals sped up their schedules, and 35% managed to cut their schedules by four weeks or more. 65% building professionals lowered the cost of the project overall, and 77% lowered construction site waste. Modular construction (Prefabricated Buildings) can be more cost-effective, but if the components are moved long distances it often comes fairly close to the costs of conventional construction. Mostly the monetary value of modular construction comes from the shorter timeframe.

Geography - Segment Analysis

North America dominated the Modular Construction market with a share of more than 40%, followed by Europe and Asia Pacific. Increasing utilization of high strength lightweight materials from the aerospace industry and presence of major players in North America is augmenting the market. According to International Trade Administration, in 2018, the industry contributed $151 billion in export sales to the U.S. economy. Investors in the U.S. aerospace industry are encouraged by the "gold standard" for aviation safety from the Federal Aviation Administration (FAA), which raises worldwide trust in the safety of aircraft and aircraft parts manufactured in the U.S.

Drivers – Modular Construction Market

The upsurge in building demand will propel the Modular Construction market.

According to Global Construction 2030 report by Global Construction Perspectives and Oxford Economics, the volume of construction output will grow by 85% globally by 2030. China, India, and the U.S. are leading the way and accounting for 57% of all global growth. According to Graham Robinson, Executive Director, Global Construction Perspectives "China's share of the global construction market will only increase slightly as growth slows down to 2030 on the world's largest construction sector. By comparison, over the next 15 years, U.S. construction will grow faster than China – growing by an average of five percent per year. Meanwhile, India is expected to see a rise in construction levels as it surpasses Japan to become the third largest construction market in the world by 2021”.

Challenges – Modular Construction Market

The alternative material can restrict the market growth

Steel Reinforced Polymer tapes used to strengthen externally bonded composite reinforcement are a relatively new material that is compatible with common organic fibers. SRP tapes are made from ultra-high strength steel wires that are embedded in cords and mounted into a fabric. The mechanical properties of SRP steel are comparable to those of other high carbon cold drawn steel by advanced processing.

Market Landscape

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Modular Construction market. In 2019, the market of Modular Construction has been consolidated by the top five players accounting for xx% of the share. Major players in the Modular Construction Market are Laing O’Rourke, Red Sea Housing, ATCO, Bouygues Construction, VINCI, and Skanska AB, among others.

Acquisitions/Technology Launches

In August 2016, Clayton Homes a manufacturer of housing and modular homes acquired Goodall Homes. The acquisition of Goodall Homes includes approximately 3,600 lots and 180 homes under construction in a five-county area in Middle Tennessee.