The global modular construction market size was valued at USD 137.8 billion in 2021 and is expected to grow to USD 271 billion by 2030. The market is expected to grow at a CAGR of 8% during the forecast period (2022–2030). Modular buildings are more efficient and cost-effective than traditional buildings. This is because modular construction uses high-performance products for both residential and commercial buildings. These products make buildings more efficient, durable, and flexible, so they meet high-performance structures' building needs and long-term demands. The market is growing because of things like lower construction costs and shorter building times, as well as a rise in demand for new buildings caused by a rise in the number of people living in cities and rapid urbanization. But the demand for modular construction is held back by the lack of skilled workers in developing countries. On the other hand, an increase in investments in infrastructure projects is likely to give market players good chances to grow during the forecast period.
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Modular construction is a new method that is being used to build homes and businesses. It is thought to be a revolutionary way to build. An increase in urbanization and industrialization has led to a quick growth of economies, which has increased the need for modular buildings. This is because modular buildings take less time to build, which lowers the overall cost. Due to the rapid growth of their populations, developing regions like Asia, Latin America, and Africa are becoming more urbanized. This is expected to have a big effect on the demand for housing, clean water, energy, transportation infrastructure, food, and social services.
This, in turn, increases the use of cost-effective modular construction technologies to ensure uniform quality. So, rapid urbanization leads to more money being spent on building homes and Infrastructure by the government and by individuals, which dramatically increases the demand for modular construction. The main benefits of modular construction technology are its high performance and ability to keep projects on schedule by moving quickly through the designing, building, and finishing stages.
Also, the modular construction method lets designers choose which parts to cast based on how well they work, saving both time and money. Modular construction is a popular choice among professionals because it can be done faster and lasts longer, which helps the market grow.
Modular construction uses high-performance products for both residential and commercial buildings. These products make buildings more efficient, durable, and flexible, meeting the long-term demand and construction needs of high-performance structures. Also, modular construction has many benefits, such as long-lasting durability, attractive designs, and high-quality construction.
These benefits can be used when building parking garages, commercial buildings, and homes. Also, modular wooden construction is highly preferred because it is energy efficient, requires little maintenance, and helps keep costs down overall.
Due to the lightweight module units and how they are put together, modular structures can fail in ways that are not good during earthquakes. Due to the precast frame panels, the modular construction structures cannot stand up to a big earthquake. Also, roofs and walls made of light Wood or metal can bend and deform in an earthquake because they are not as rigid as they used to be. So, modular construction is less common in places where there are a lot of earthquakes. The growth of the market is slowed down by the fact that people are afraid of modular construction technology.
Apart from this, the growth of the market is mostly held back by the lack of skilled workers and Infrastructure. When the weather is not clean, it is not possible for construction companies to move modular parts over long distances. Depending on the shipper, where the job is, and where the modular construction plant is, this can cause shipping costs to go up. So, the market is being held back in a big way by growing worries about moving and handling modules.
Also, logistics can be a big problem in some situations. In the case of a large project to build a distribution center, this is likely to be a big problem for the use of modular parts. Also, modular construction is not practical for smaller commercial projects in these areas, which makes it more expensive to build because of how unique it is. Both these limitations are proving to be major barriers to the overall growth of the modular construction market.
Infrastructure investment needs are going up a lot all over the world, but especially in developing economies. Between 2014 and 2025, the world is expected to spend around USD 78 trillion on building Infrastructure. Also, infrastructure spending has recovered from the global financial crisis and is expected to grow by more than USD 5 trillion per year by 2025. The growing number of people living in cities in emerging markets like India, Japan, Indonesia, Nigeria, Mexico, and China is likely to increase spending on infrastructures like homes and businesses.
Also, modular construction is becoming more popular because it has many benefits, such as better structural stability, faster and better construction, more flexibility, less waste, and less need for labor. With all these advantages, many new players are trying their fate in the said market to capture the growth and earn valuable revenues. With this, the global modular construction industry is getting more entries by professionals and even start-ups who are trying to make something big in the said market domain.
The global modular construction market share is segmented by type and by material.
On the basis of type, the global modular market is further classified into permanent and Re-locatable.
The permanent type of segmentation is the major dominant type in the segmentation, which has a market value of USD 87 billion in 2021 and is expected to grow to USD 148 billion in 2030 at a CAGR of 7%.
Permanent modular homes are made of concrete, steel, and Wood. Building modular houses for people to live in has become a popular trend in the construction industry because it is easy, convenient, and inexpensive. Modular houses are cheap and easy to put together and come in many different styles and patterns. Some popular house shapes are duplexes and apartments with multiple floors. Also, the growth of the market is greatly affected by the rise in demand for customized and do-it-yourself construction. Shipping containers are being used to build homes by a lot of competitors, architects, and builders. For example, Z Modular in the U.K. makes modular homes out of used shipping containers for student housing, multifamily housing, and housing for people who work there. Also, the growing popularity of green buildings in developed countries like the U.S., the UK, France, and Germany is expected to provide good opportunities for the modular construction industry to grow.
The Re-locatable segment is the second dominant under type that has a market value of USD 51 billion in 2021 and is expected to grow to USD 103 billion by 2030 at a CAGR of 8%.
Modular homes that can be moved to a new location are already built or put together in a workshop. Construction is best done off-site, using different ways to make things. After construction, the parts or subassemblies are moved to the final building site and put together there. Before being moved to their final locations, these houses are built as permanent structures.
They can also be used as temporary homes for people who need to stay there. Most of the time, modular homes that can be moved are used as temporary housing or emergency shelters. These homes can be used as places for health care, sales, retail, and fast food. These mobile homes are also sometimes used to house homeless people and as temporary shelters for people who have been hurt by natural disasters like hurricanes, earthquakes, and floods. The re-locatable modular construction market is growing a lot because of things like these.
On the basis of material, the global modular market is further classified into steel, wood, and concrete, where wood owes the major market share.
Steel has a significant market share that stands at USD 27 billion in 2021 and is expected to rise to USD 56 billion by 2030 at a CAGR of 8.5%.
Steel modular construction is often used to build schools and student housing structures. Steel modular construction makes tall buildings more stable and allows for quick installation on-site, about 8 units per day. Steel buildings are also made with four-sided modules, open-sided modules, special modules for stairs or lifts, and modules that do not carry any weight. Due to its strength and durability, steel modular construction is also good for residential developments, commercial, mixed retail, and parking lots in cities. These factors will give market players good chances to grow their businesses on a global scale during the next few years.
Wood is the most dominant market segment with a market value of USD 95 billion in 2021 and is anticipated to grow to USD 179 billion in 2030 at a CAGR of 7%.
Due to its high compressive strength and resistance to bending, wood modular construction is becoming more popular in commercial buildings, single-family detached homes, and housing in cities. High-quality wood construction that is easy and quick to design is a key factor that helps this market grow. Also, prefabricated wood products are more accurate in size than other materials like steel and concrete, which is a big reason why the market is growing so quickly.
Concrete is listed third among the segmentation based on material type. It has a market value that stood at USD 12 billion in 2021 and is expected to reach USD 21 billion by 2030 at a CAGR of 7%.
Building with concrete modules takes less time and is much cheaper than other methods. Also, modular concrete construction is becoming more popular in homes, schools, and businesses because it is more resistant to water and heat. Along with this, many companies use concrete for modular construction because it reduces the amount of waste, causes less disruption, makes working conditions safer, and uses less energy. Also, there are not enough affordable homes in developing countries like India, China, and others. This gives market players good chances to grow.
The global modular construction market share is primarily divided into three regions, namely – North America, Europe, and Asia-Pacific.
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Out of these three regions, the Asia-Pacific region is the most dominant and owes the major market share among the other regions.
North America being a developed region and having the presence of superpowers like the U.S. and Canada, owes a significant share of the global modular construction market that stood at USD 28 billion in 2021 and grew at a rapid pace to USD 53 billion by 2030 at a CAGR of 7%.
Europe is the second dominant region in terms of market value for the said market, which stands at USD 33 billion in 2021 and is expected to reach USD 49 billion by 2030 at a CAGR of 6%. Europe is known as the industrial hub of the world, which is why it has a significant market share in every industrial segment, including the modular construction market.
Asia-Pacific is the most dominant and leading region among the three regions, which has a market value of USD 67 billion in 2021 and is going to reach USD 139 billion by 2030 at a CAGR of 8%. Asia-Pacific is one of the most fast-paced developing regions. With the presence of major emerging economies like India and China, it does have a major market share in nearly every industrial segment out there.