Modular Construction Market Analysis Report | 2023-2028

Market Insights

"The modular construction market was estimated at USD 95.43 billion in 2022 and is likely to grow at a CAGR of 5.73% during 2023-2028 to reach USD 134.22 billion in 2028".

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Market Dynamics

Introduction

Modular construction is a process in which the components of the building are constructed away from the site, whereas the installation of the prefabricated components is done on-site using cranes. Modular construction can be done with different types such as permanent and relocatable. They are used in different end-use sectors such as housing, commercial, education, healthcare, and industrial.

Modular construction offers numerous advantages, which include-

• Modular buildings can be built significantly faster compared to traditional stick-built structures. The prefabrication of components in controlled factory conditions eliminates delays and disruptions commonly encountered on conventional construction sites.
• Modular buildings are often of superior quality when compared to traditional stick-built constructions. Manufacturing components in a factory using precise tools and techniques enables strict quality inspections before shipping them to the construction site.
• Modular construction represents a more sustainable approach to building. These buildings require less energy during the construction process and can incorporate recycled materials, contributing to a reduced environmental impact.

Market Drivers

These factors are expected to boost the demand for the global market in the coming years:

• Infrastructure spending by the global and regional economies.
• Further, spending on infrastructure and capital projects is estimated to increase substantially over the next decade.
• China, India, and other countries in the Asia Pacific region, along with Brazil and South Africa, are investing enormously in the infrastructure industry, which is required for modernization and commercialization.
• Rapid urbanization in emerging economies, such as Brazil, India, Malaysia, and Thailand is likely to fuel the spending for the major infrastructure sectors, such as power, construction, and transportation.
• The improvement in economic conditions of emerging markets.
• Governments worldwide are increasingly endorsing modular construction as a means to enhance sustainability and minimize construction waste.
• The growing recognition of sustainable construction has elevated the prominence of modular construction as a more environmentally friendly alternative to conventional building techniques. Modular buildings consume less energy during construction and can be constructed using recycled materials.

Restraints:

Transportation and assembly risks in modular construction. Modular construction involves the transportation and assembly of prefabricated components from the factory to the building site, which can cause damage and high transit costs.

Precision is crucial in modular construction, as it requires flawless alignment of beams, columns, walls, and floors. Improper assembly can lead to joint failure and leaks, posing a risk to the entire building.

Challenges:

Insufficient awareness in developing economies. The construction industry is slow to adopt new technologies and has limited R&D budgets. The modular construction market has a positive outlook due to high growth. However, in developing countries like Asia, the Pacific, Africa, and South America, people are less aware of modular construction and its benefits.

They perceive modular buildings as short-lived or unsuitable for natural disasters. To grow the industry, it's crucial to educate customers about the positive environmental effects and healthy lifestyle benefits of modular construction.

Opportunities:

A surge in population and development will lead to an increase in the number of projects. The UN predicts a global population of over 9.3 billion by 2050, driven by an increasing population, industrial expansion, and the shift of rural populations to urban areas. This growth has fueled the growth of the modular construction market, with new construction in both commercial and residential sectors.

Segments Analysis

By Construction Type

"The permanent segment held more than 60% share of the market in 2022 and is expected to remain dominant during the forecast period".

The market is segmented as permanent and relocatable. The increase in demand for new buildings built in less time, reduction in the cost of construction, and convenience in the building process are the major reasons for the dominance of this segment of the modular construction market.

By Material Type

"The steel segment is expected to remain dominant during the forecast period".

The market is segmented as steel, precast concrete, wood, plastic, and others. The steel segment is expected to remain dominant during the assessment period owing to its number of benefits compared to other materials, such as strength, durability, fire resistance, flexibility, structural integrity, and less requirement of maintenance throughout the life of the building.

By End-Use Sector Type

"The housing segment leads the market duirng the forecast period".

The market is segmented as housing, commercial, education, healthcare, and industrial. The housing segment leads the market driven by the increase in population; thus, creating demand for new houses in the urban and suburban areas along with the rise in the construction activities of buildings and institutes.

Regional Analysis

"Asia-Pacific is estimated to be the fastest-growing market during the forecast period".

The growth is owing to the increasing demand for houses at economical cost in developing economies. China and India are the progress engines of the region. In addition, China is likely to actively participate in abating housing problems, globally. Europe and North America are also expected to offer substantial progress opportunities during the assessment period.

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key Players

The following are the key players in the Modular Construction Market (arranged alphabetically).

• Algeco Scotsman
• ATCO
• Bouygues Construction
• Laing O’Rourke
• Red Sea Housing
• Skanska AB
• VINCI

Note: The above list does not necessarily include all the top players in the market.

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Report Features

This report provides intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into the dynamics and will enable strategic decision-making for the existing players as well as those willing to enter the market.

What Deliverables Will You Get in this Report?

Research Methodology

• This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.
• More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles have been leveraged to gather the data.
• We conducted more than 10 detailed primary interviews with the market players across the value chain in all four regions and with industry experts to obtain both qualitative and quantitative insights.

Customization Option

Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to 3 players).
• SWOT analysis of key players (up to 3 players).

Segmentation

• Current segmentation of any one of the module types by end-use sector type.

Competitive Benchmarking

• Benchmarking of key players on the following parameters: Product portfolio, geographical reach, regional presence, and strategic alliances.

Custom Research: Stratview Research offers custom research services across sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry to sales@stratviewresearch.com.