Modular Construction Market Expected to Reach $234.7 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Modular Construction Market," The Modular Construction Market was valued at $131.1 billion in 2021, and is estimated to reach $234.7 billion by 2031, growing at a CAGR of 6.1% from 2022 to 2031.

Benefits associated with products through modular construction market analysis is that it is easy to install, easy to transport, offers space constraints, and provide an aesthetic look. Modular construction used in marine transportation protects from natural calamities, such as tsunami, earthquakes, and others. In addition, the manufacturers of modular construction are focusing on business expansion and new projects as strategies to increase their market share. For instance, in October 2020, SG Blocks entered into a strategic partnership with Harrison, Walker and Harper (HWH), an engineering, contracting, and industrial services firm. Under this alliance, HWH will become an SGB preferred partner to complete site work and installation of single-family modular homes. Similarly, in September 2020, SGB and its subsidiary, SG Residentials, entered into a partnership with Capital Plus Financial (CPF), one of the largest Community Development Financial Institutions (CDFI) in the U.S. and a subsidiary of Crossroads Systems, Inc. With this partnership, SGB aims to provide affordable modular homes at low-to-moderate-income areas across the country and Puerto Rico. 

An increase in demand for prefabricated housing units, owing to reduction in construction cost & time and government initiative toward green building concept is predicted to cater to the growth of the modular construction market. Many competitors, architects, and builders are taking advantage of used shipping containers for building homes.  

In addition, increase in urban population and industrialization in developed countries, such as the U.S., Japan, France, and Canada, surges the demand for modular construction, owing to features such as space issues, movability, and easy of transport. Modular construction is compact and easy to move from one place to other, which drives the growth of the modular construction market. However, modular or prefabrication products need to install heating ventilation and air conditioning systems in extreme cold and hot regions, which is anticipated to hamper the growth of the market. Conversely, upsurge in demand for new construction and increase in focus toward affordable housing structures are anticipated to provide lucrative opportunities for the modular construction market growth.

Moreover, developed countries, such as the U.S., Japan, the UK, and others, had implemented initiatives that focus on building, designing, and installing green building concept. This modular construction has features, such as cost-effective and energy-effective prefabricated products, for construction, which, in turn, drive the growth of the modular construction market. Factors, such as reduced cost and time required for modular construction and rise in demand for prefabricated products for residential and commercial construction activities, drive the growth of the market and helped in expanding modular construction market size. 

However, outbreak of COVID-19 has led to halt in construction and manufacturing activities across the globe. This, in turn, hindered the growth of the modular construction market for a very small period. Conversely, different industries are gradually resuming their regular manufacturing and services with the launch of vaccines and reduction in number of COVID-19 cases. This is leading to re-initiation of companies at their full-scale capacities, that helped the market to recover by end of 2021. 

On the contrary, several players such as ATCO and Fluor Corporation are expanding their business worldwide, owing to augmented customer base, improved effective operations, expanded geographical reach, and developed product portfolio. In addition, many major players in the global modular construction industry are offering solutions considering convenience factors to increase their sales. All such factors are expected to offer lucrative opportunities for the market. 

Surge in demand for construction of prefabricated construction, owing to affordable housing structures drives the growth of the modular construction market. There has been a rise in demand for modular construction products, owing to reduction in cost and time required for construction, ease of installation, and lack of space in large cities. This, in turn, drives the growth of the modular construction market. Increase in focus toward affordable residential, commercial, and industrial spaces has significant impact on the market growth. Moreover, modular construction buildings are developed using containers that protect from changes in external environment and are easy to install & relocate. 

Moreover, infrastructure investment requirements are increasing significantly across the globe, particularly in developing economies. Overall, around $78 trillion is expected to be spent globally between 2014 and 2025 on infrastructural development. Moreover, infrastructure spending has recovered from the global financial crisis, and is expected to grow more than $5 trillion per year by 2025. Furthermore, surge in urbanization in the emerging markets, such as Indonesia, Nigeria, and China, is expected to boost spending for infrastructural sectors such as residential houses and commercial spaces. In addition, increased adoption of modular construction offers multiple advantages such as enhanced structural stability, rapid & quality construction, superior flexibility, improved wastage control, and less manpower requirement. All such instances are anticipated to provide lucrative opportunities for the growth during the modular construction market forecast period.

Key Findings of The Study 

• The report provides an extensive analysis of the current and emerging global modular construction market trends and dynamics.  

• By type, the permanent segment was the largest revenue generator having significant modular construction market share in 2021. 

• By material, the steel segment generated the highest revenue in 2021. 

• By end user, the residential segment dominated the market in 2021.  

• Region wise, North America is anticipated to dominate the global modular construction market throughout the study period.