February 21, 2024

The Modular Construction Market Driven By Rising Demand For Affordable Housing

The modular construction market involves the manufacturing and assembly of building sections or modules at a location other than the final construction site. Modular construction provides an efficient and eco-friendly solution compared to traditional construction methods as components are manufactured under quality controlled factory conditions and then transported for assembly at site. Modular building structures are energy efficient and use systems that are sustainable for the environment. They conform to the latest earthquake and disaster resilient building codes and offer flexible modular designs that cater to specialized construction needs.

The global Modular Construction Market is estimated to be valued at US$ 84 Billion in 2024 and is expected to exhibit a CAGR Of 6.7% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

Rising focus on sustainable construction
Modular construction allows for significant reduction in material wastage and carbon emissions compared to traditional stick built methods. Modular components are fabricated under controlled factory conditions which results in enhanced quality, better use of materials and improved sustainability. Modular builders are increasingly designing and developing green building structures focused on renewable energy integration, energy efficiency, low carbon footprint, water conservation and use of sustainable materials. Strict regulatory norms pertaining to green building codes and sustainability certification systems are driving the demand for environment-friendly and sustainable modular construction methods.

 

Porter’s Analysis

Threat of new entrants: The threat of new entrants in the modular construction market is moderate. High capital costs for setting up manufacturing facilities pose a significant barrier.

Bargaining power of buyers: The bargaining power of buyers is high due to the availability of numerous vendors offering similar products in the market.

Bargaining power of suppliers: Suppliers have moderate bargaining power due to differentiated products and services.

Threat of new substitutes: The threat of substitutes is low as modular construction offers benefits over conventional construction methods.

Competitive rivalry: The competitive rivalry is high among vendors due to fragmented nature of the market.

Key Takeaways

The Global Modular Construction Market Demand is expected to witness high growth. The global Modular Construction Market is estimated to be valued at US$ 84 billion in 2024 and is expected to exhibit a CAGR of 6.7% over the forecast period 2023 to 2030.

Regional analysis European region is expected to dominate the global modular construction market during the forecast period owing to rapid infrastructure development activities and implementation of supportive regulations. North America is expected to hold a significant share of the modular construction market owing to growing activities in the commercial and healthcare sectors in countries like the US and Canada. The adoption of modular construction is high in countries like Japan and Singapore due to space constraints.

Key players operating in the modular construction market include Red Sea Housing, Bouygues Construction, Skanska AB, Kleusberg GmbH, KEF Katerra, Lendlease Corporation, Laing O’Rourke, ATCO, VINCI, and Algeco Scotsman.

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