February 21, 2024
Modular Construction Market

Rising Demand for Affordable Housing to Fuel Growth of the Modular Construction Market

The global Modular Construction Market is estimated to be valued at US$ 84.48 Bn in 2023 and is expected to exhibit a CAGR of 6.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Modular construction refers to a process in which structures are designed and built off-site, in sections, using the same designs and materials. These pre-fabricated modules are then transported and assembled at the construction site. Modular construction offers advantages such as faster construction, cost-effectiveness, reduced wastage, and consistent quality. It is increasingly being adopted for residential and commercial construction to meet the rising demand for affordable housing and infrastructure development. Some key product types in the modular construction market include permanent modular buildings and relocatable modular buildings. Permanent modular buildings are designed for longer-term use, while relocatable buildings can be transported and reused at multiple sites.

Market key trends:
One of the major trends in the modular construction market is the growing adoption of mass customization. Modular construction allows for mass customization where modules and designs can be combined and customized as per a client’s needs in terms of size, layout, and features. This enables developers and builders to offer personalized housing options to customers while retaining production efficiencies of modular construction. Another key trend is the development of affordable modular homes. With the rising housing shortage, modular construction is playing a crucial role in providing cost-effective housing. Companies are investing in research to develop modular designs that can significantly reduce construction costs and time for affordable homes. Sustainability is also a major focus area, with many builders opting for greener building materials, renewable energy integration, and sustainable waste management practices in modular construction.
Porter’s Analysis
Threat of new entrants: Moderate. Require large upfront investments and established distribution networks limit new entrants in the modular construction market.
Bargaining power of buyers: Moderate to high. Modular construction companies face moderate to high bargaining power of buyers as buyers have various product options to choose from.
Bargaining power of suppliers: Moderate. Suppliers have a moderate bargaining power due to availability of substitute materials.
Threat of new substitutes: Low. No major threat of substitutes and modular construction has various advantages over traditional construction methods limiting threat from substitutes.
Competitive rivalry: High. The global modular construction market is competitive with many international players offering wide range of products.

Key Takeaways
The global Modular Construction Market Share is expected to witness high growth, exhibiting CAGR of 6.5% over the forecast period, due to increasing construction activities and cost benefits of modular construction. The modular construction market size for 2023 is estimated to reach US$ 84.48 Bn.

Regional analysis: North America dominates the modular construction market currently due to growing infrastructure development projects. Asia Pacific is expected to witness the fastest growth during the forecast period owing to increasing urbanization and rising construction spending in countries like China and India.

Key players operating in the modular construction market are Guerdon Modular Buildings (U.S.),Laing O’Rourke (U.K.),ATCO (Canada),Red Sea International Company (Saudi Arabia),Bouygues Construction (France),VINCI Construction Grands Projets (U.K.),Skanska AB (Sweden),Algeco (U.K.),KLEUSBERG GmbH & Co. KG (Germany),Katerra (U.S.),Lendlease Corporation (Australia). Key players are focusing on expanding their modular product portfolio and geographical footprint to strengthen their market position.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it