Rapid industrialization and urbanization combined with an increasing demand for green building are prominently driving the growth of the global modular construction market.
The global modular construction market was estimated at USD 95.49 billion in the year 2020 and is expected to reach USD 141.80 billion by 2027. The modular construction market is expected to grow with a CAGR of 6.1%, in the forecast period (2017-2027).
The major factor driving the growth in global modular construction market is the rapid industrialization and urbanization along with the rising demand for complex structures at affordable rates. The modular construction method offers more attractive and cost-effective construction process than the traditional main site-built project. It significantly helps in reducing the amount of labour needed on the job-site construction. Besides this, a modular construction project can be completed in multiple pieces at various locations, rather than all at once at one main site. Owing to this, modular construction projects can be completed 30-50% quicker than traditional construction methods. This method, therefore, helps in cutting the unnecessary costs and decreasing the risk associated with safety related accidents and replacements. These benefits offered by modular construction are thereby driving the demand for modular construction market across the globe.
Moreover, favourable government initiatives and investments in infrastructural development by several major countries, is further expected to propel the demand for the modular construction market. In 2016, the government of Canada launched its ‘Investing in Canada Plan’ project. This project involves an investment accounting to over $180 billion for building infrastructure in the country. The plan provides funding for several major projects relating to affordable housing, developing rural communities and public transit among others. In May 2020, the Australian Government launched a $50 million Smart Cities and Suburbs Program for developing innovative technology-based solutions to urban challenges for Australia’s cities, suburbs, and towns. This program is supporting the delivery of innovative smart city projects that will improve the productivity, sustainability and liveability of cities and towns across Australia. Such government initiatives are expected to immensely drive the modular construction market demand.
Despite such strong growth factors, rising offsite manufacturing investments, along with, growing transportation and logistics issues pose certain challenges in the growth of modular construction market. Modular construction heavily depends on offsite manufacturing activities that requires huge investments and project-preplanning. This is restraining the growth of modular construction market. However, the increasing stringent policies by several nations to reduce construction waste and increase the adoption of green buildings is expected to offer lucrative growth opportunity in the market. Modular construction offers sustainable construction process by using eco-friendly and recycled building materials in the construction process, thereby driving the modular construction market.
Impact of COVID-19 pandemic on Global Modular Construction Market
The Covid-19 outbreak has majorly impacted economies across the globe and led to lowest growth in the construction sectors. Many construction projects including residential, educational, airports, and others in its final or bidding stages have been cancelled or delayed. The data released by the American Road & Transportation Builders Association shows that infrastructure projects exceeding $9.6 billion have been cancelled or have been delayed due to the pandemic. The negative hit of pandemic on the construction sector has majorly impacted the growth of modular construction market across the globe. However, the pandemic has resulted in increasing the demand for hospitals and patient bed facilities based on modular construction, mainly due to less amount of completion time. For instance, the government of China completed the construction of COVID-19 emergency hospitals with the help of modular construction. This included completion of a Huoshenshan hospital that offers 1,000-bed within ten days and Leishenshan hospital that provides 1,600-bed facility within 12 days in the Wuhan city. Construction of such projects across the globe have attributed in driving the modular construction industry during the pandemic.
Global Modular Construction Market by Region Outlook (Revenue, USD Billion, 2017-2027)
Based on the region, Asia-Pacific is projected to attain the fastest growth in modular construction market during the forecast period. This growth is mainly attributed to the increasing population along with rising desire for improved standard of living in several developing economies in the region. Several urbanization and industrialization projects launched in the region are also propelling the growth of modular construction industry. China has the largest share in the building market across the world, accounting up to 20% of all construction investment globally. The country plans to spend approximately USD 13 trillion on constructing buildings by 2030. In addition, it plans to move 250 million people to its new megacities by 2025. Apart from this, in 2015, India launched its Smart Cities Initiative (SCI) to develop 100 smart cities across the country making them citizen friendly and sustainable. Projects like these are positively impacting the growth of the modular construction market in this region.
The Global Modular Construction Industry Segmentation:
Global Modular Construction Market Type Outlook (Revenue, USD Billion, 2017-2027)
Global Modular Construction Market Material Outlook (Revenue, USD Billion, 2017-2027)
Global Modular Construction Market Application Outlook (Revenue, USD Billion, 2017-2027)
Key Findings:
Company Profiles and Competitive Intelligence
The key players operating in the modular construction market are:
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