by Modular construction refers to a process in which a building is constructed off-site, under controlled plant conditions, using prefabricated building sections called modules. These modules are later transported and assembled on site with minimum additional work. Modular construction allows fast and accurate construction with higher quality control, minimal waste generation, and cost savings. It helps reduce on-site construction time significantly. Modular construction offers precision-engineered sections which reduces the risk of errors and rework. The need for skilled labor is also reduced as major construction work happens off-site under covered conditions.
The global Modular Construction Market is estimated to be valued at US$ 84.48 billion in 2023 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:
Sustainability has become a key driver for the modular construction market. Manufacturers are focused on green construction techniques and reducing the environmental footprint of buildings. Use of sustainable and recyclable materials, energy efficient construction, and zero waste on construction sites are some sustainability measures integrated in modular building designs. Next generation modular buildings are being designed to perform much better in terms of energy and resource efficiency. Advanced modular systems with smart construction technologies are also emerging. These systems leverage data analytics, automation, and IoT for intelligent, informed and efficient construction processes. Such advancements are expected to make modular construction an increasingly viable solution for smart, sustainable and future ready construction.
Porter’s Analysis
Threat of new entrants: Low barriers to entry. Modular construction requires specialized skills and equipment increasing the capital requirements.
Bargaining power of buyers: Fragmented buyers with varying demands and requirements. Buyers have moderate bargaining power due to the customized designs and short lead times required.
Bargaining power of suppliers: Dominated by large suppliers globally. Suppliers have moderate to high bargaining power owing to availability of components from alternate sources.
Threat of new substitutes: Threat of new substitutes is moderate due to advantages in terms of speed, sustainability and resource efficiency that modular construction provides over conventional construction.
Competitive rivalry: High competitive rivalry. Market competition based on product differentiation, pricing, and expansion to newer geographies and application areas.
Key Takeaways
The Global Modular Construction Market Demand is estimated to be valued at US$ 84.48 billion in 2023 and is expected to exhibit a CAGR of 6.7% over the forecast period 2023 to 2030.
The global modular construction market is expected to witness high growth driven by North America and Europe. The modular construction market in North America dominates owing to factors such as rapid urbanization and reconstruction activities. Europe accounts for the second largest market share led by investments in construction projects, favorable government policies, and increasing renovation activities.
Key players operating in the modular construction market include Red Sea International Company, Laing O’rourke, ATCO Group, Skanska AB, Algeco Scotsman, Kiewit Corporation, Lendlease Corporation, and Boehler Engineering GmbH & Co. KG. The companies are focusing on mergers and acquisitions, expanding their product portfolio in prefabricated components and services. For instance, in 2021, Skanska acquired BoKlok to strengthen its modular construction business in Europe.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
