Panelized Modular Building Systems Market Size, Share & Trends Analysis Report By Product Type (Timber Frame, Light Gauge Structural Steel Framing, Concrete), By End-User Industry (Residential, Commercial, Infrastructure, Industrial and Institutional), By Panel Type (Wall Modules, Roof Panels, Floor Panels) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global panelized modular building systems market size was valued at USD 106,487.20 million in 2022. It is expected to reach USD 186,268.49 million by 2031, growing at a CAGR of 6.41% during the forecast period (2023–2031).

Panelized modular building systems are a method of construction that allows for the rapid construction of energy-efficient dwellings by utilizing modern techniques, high-quality materials, and a regulated work environment. Structures are built using panelized and modular building systems, whose parts are produced in factories and delivered to the construction site to be put together to create homes. These include roof trusses, wood kits, wall frames, floors, stairs, and other structures. The global panelized modular building systems market is driven by the advantages of panelized modular buildings, such as their low labor requirement, an advantage in time and cost savings, and others.

Market Dynamics

Global Panelized Modular Building Systems Market Drivers

Growing Demand for Off-Site Construction

Prefabrication, another name for off-site construction, is manufacturing various building components in a factory before assembling them on the building's site. The pieces could be made of precast concrete or composite materials. Volumetric modules, like bathrooms or bedrooms, flat-pack elements like walls or beams, or even entire structures, can be produced at off-site factories. Off-site construction has seen a significant increase in demand in recent years as it is used for various projects, including luxury condos, hotels, and airport terminals. Shorter construction times, lower risk, higher quality, lower costs, a better working environment, and less negative environmental impact are some benefits of off-site construction driving demand. The market for panelized modular building systems is anticipated to grow due to the current uptick in construction activity, the need to reduce the number of on-site workers, and a traditional, affordable, and quick method.

Rising Demand for Structurally Insulated Panels in Homes

The structural insulated panels (SIPs) comprise two structural skins and a rigid foam insulation core. Expanded polystyrene (EPS), polyurethane, polyisocyanurate (polyiso), and extruded polystyrene are some of the core materials used in SIPs. High levels of insulation are provided by all these materials, which are entirely continuous within the panel, with only a small amount of framing lumber in between. Oriented strand board is typically used for SIP skins (OSB). The concept of zero-energy homes is impractical without the enabling building envelope that SIPs offer, so they play a significant role in the energy state of homes. SIPs can help lower energy consumption and move the world toward a sustainable future, whether used to improve the efficiency of the typical home, multifamily building, or commercial building. The demand for SIPs in energy-efficient prefabricated homes drives the market for panelized modular building systems in the future because they are essentially a single-shell structure that is load-bearing, thermally efficient, and provides much greater internal space.

Global Panelized Modular Building Systems Market Restraints

Requirements for Transportation Logistics

Most modular construction activities take place off-site, necessitating transportation, and getting the prefabricated materials on-site requires extensive logistics. Transportation costs greatly influence the project's viability. Studies indicate that shipping modules more than 150 to 200 miles from the factory site result in high transportation costs. The maximum practical distance modules should need to travel from the factory to the site is generally accepted in the industry to be 125 miles. The weight of the vehicles that transport these modules is regulated in many regions. Most funding for a modular project must be raised all at once. This is because each module performs the duties of a standalone structure. To complete their work despite the hectic schedule, businesses and service providers require pre-financing. Before beginning fabrication, the manufacturer will frequently ask for a sizable deposit. The market's expansion is anticipated to be hampered by all the factors above during the forecasted period.

Global Panelized Modular Building Systems Market Opportunities

Increasing Investment in Infrastructure and Commercial Construction

To address current social and economic problems in Vietnam's cities, the Nest Modular Housing project in Ho Chi Minh City, Vietnam, uses modular construction methods. The project's 7,500-square-foot site will house 225 modular homes. m with a 639 m building height, stores, community amenities, and gardens. The market demand for panelized modular building systems is likely driven by the estimated construction cost of about 21,500,000 USD. Therefore, the ongoing and completed projects in developing economies, as well as the efforts to promote modular construction and the implementation of panelized modular systems to address these economies' growing populations, are changing the public's perception of modular construction and giving it the potential for high design and a modern high-tech image, which is what will ultimately drive the market demand soon.

Regional Analysis

Asia-Pacific Dominates the Global Market 

By region, the global panelized modular building systems market is segmented into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 7.41% during the forecast period. Prefabricated buildings have gained popularity over the past ten years due to the economy's rapid growth, the increase in labor costs, the accuracy and quality of prefabricated components, advancements in construction technology and management standards for assembly buildings, and the promotion of national policy factors. The demand for residential construction in the nation is anticipated to continue to be driven by rising household income levels and population shifts from rural to urban areas. The residential construction industry's growth is driven by the public and private sectors' increased focus on affordable housing. Infrastructure that is not residential is anticipated to expand significantly. The nation’s aging population drives the need for new hospitals and healthcare facilities. Colossal commercial and office buildings have been built due to the structural changes in the Chinese economy over the past few years, which have seen the service sector account for a more significant portion of the GDP overall.

Europe is expected to grow at a CAGR of 5.24% during the forecast period. The British government places a high priority on the construction sector. In 2019, the construction industry made up about 6% of the nation’s GDP. With rising capacity and confidence in prefabrication construction solutions, the market in the United Kingdom is changing. An industrial source claims the nation builds about 15,000 prefab homes each year out of the 200,000 homes built annually. This is primarily because residents have not adopted prefab housing well. Manufacturers, including Legal and General, Berkeley Homes, Urban Splash, IKEA, and Huf Haus (among others), predict this number could rise sharply during the forecast period. Prefab homes may address the nation's housing supply shortage by erecting more buildings.

The building industry in the United States has become more aware of panelized modular construction technology. Cities are investing in modular and prefab construction to deliver multifamily residential developments in response to rising housing costs. In the United States, 1.29 million brand-new privately owned housing units were started in 2019. Due to the demand for housing, this number has been steadily rising over the past few years. Building information modeling (BIM) adoption and increasing infrastructure and commercial construction spending in the US will likely present opportunities for the market under study during the anticipated time frame.

In Brazil, the past few years have seen slow economic growth. By building efficient and self-sufficient homes, the Brazilian panelized modular building system market is anticipated to expand. As the developer population grows, prefabricated buildings are expected to become more prevalent in Brazil. To address Brazil's housing crisis, the Brazilian company Urban3D prefabricates building components before assembling them on-site. Brazil's commercial tourism industry is seeing an increase in small projects that use quick and affordable prefabrication construction methods. Brazil's majority of educational projects are made of prefabricated concrete components with rigid modulations and, in rare instances, steel due to the economy, rationalization, and speed of construction.

Saudi Arabia's residential construction sector needs help to provide enough affordable housing due to a growing population and an influx of foreigners. Due to their low cost and quick construction, penalized systems for modular homes have seen an increase in demand. These building systems also have other benefits, including energy efficiency, design flexibility, and quicker completion, which are expected to fuel market expansion. Building information modeling (BIM) adoption and rising infrastructure spending in developing nations will likely present opportunities for the market under study during the anticipated time frame. The modular construction project is also anticipated to support Saudi Arabia's homeownership strategy, which aims to have 70% of the country's population own a home by 2030. The Ministry of Housing supports it. In remote and rural areas, penalized modular construction is proliferating, which is anticipated to significantly impact the market's overall growth during the forecast period.

Segmental Analysis

The global panelized modular building systems market is segmented by product type, end-user industry, and panel type.

Based on product type, the global panelized modular building systems market is bifurcated into timber frames, light gauge structural steel framing, and concrete.

The light gauge structural steel framing segment is the highest contributor to the market and is expected to grow at a CAGR of 8.02% during the forecast period. Structural frames from cold-formed steel panels are included in light-gauge steel framing systems. They can be used for floor joists, curtain walls, roof trusses, load-bearing exterior walls, non-load-bearing interior walls, and load-bearing exterior walls. These parts primarily make use of highly tensile, lightweight cold-formed steel sections. These structural steel framing parts are additionally galvanized to improve their overall performance in the application of modular construction. Light gauge structural steel framing is anticipated to have the opportunity during the forecast period due to the rise in demand for modular structures that are both lightweight and durable.

Timber frames are used in panelized modular building systems because of their accuracy, toughness, eco-friendliness, and cost-effectiveness. Before transmitting the loads to the foundations, these are used to support the loads imposed by the floors and roofs. Timber frame open panel systems, which consist of studs, rails, sheathing on one face, and a breather membrane, are structurally engineered panels that make up the interior load-bearing leaf of the exterior wall. Homes with one floor are typically built using timber-based materials. Additionally, multi-story buildings are becoming more popular thanks to timber products with improved strength and durability.

Based on the end-user industry, the global panelized modular building systems market is bifurcated into residential, commercial, infrastructure, industrial and institutional.

The residential segment owns the highest market and is expected to grow at a CAGR of 7.26% during the forecast period. The panelized modular building system uses construction methods that use cutting-edge technology, high-quality materials, and a controlled work environment to construct energy-efficient homes faster. Penalties also offer more consistent quality, precise building techniques that result in a more substantial house and assist in speeding up the construction process. Residential construction has significantly grown in North America, Asia-Pacific, and Europe. However, residential construction is increasing in North America and Europe, mainly due to the high demand for homes in North America. The Asia-Pacific region has the most significant construction industry in the world. It is expanding at a healthy rate due to urbanization, rising middle-class incomes, and population growth.

The commercial segment is the most critical market for panelized modular buildings. 

Additionally, one of the most important markets for modular construction in the retail sector is the office sector. The demand for panelized building systems in this market is rising quickly in response to the expansion of commercial activity worldwide. Most modular high-rise structures constructed using 3D volumetric modules are steel, whereas those constructed using panelized and volumetric techniques are typically concrete. As more people worldwide enroll in school, the education sector proliferates. This factor has made it easier for several educational institutions to be founded recently. Investments in education are rising in the public and private sectors. The market for panelized building systems is anticipated to expand due to this factor.

Based on the panel type, the global panelized modular building systems market is bifurcated into wall modules, roof panels, and floor panels.

Various materials, including concrete, wood, structural steel, and composite materials, are used to make wall modules. Prefabricated wall modules are created in the manufacturing facilities, then assembled on the job site. These modules have numerous applications in the construction industry, including those for headwall assemblies, curtain wall assemblies, interior walls, and exterior walls. Wall units that bear loads resist and transfer loads from other elements, and their removal would compromise the building's stability or strength. Window walls, spandrel panels, and solid wall panels are typical load-bearing wall units.

Due to their weather resistance, increased durability, and simplicity of installation, roof panels are typically used on the exterior of modular structures. Due to their flexible design options, higher R-value, durability, simplicity of installation, and cost-effectiveness, insulated roof panels are frequently used in panelized modular structures. These panels provide improved thermal performance, increased durability, and cost-effective thermal performance for the interior of buildings. These panels- typically substantial structures- on the roof of modular structures—are arranged in rectangular formations. Since the products are used outside, they are simple to replace and fix if damaged.

Impact of covid-19

Recent Developments

• January 2023- Enterprise and Wells Fargo Foundation announced USD 20M Housing Affordability Breakthrough Challenge.
• January 2023- Weston stated first MMC homes would start rolling off the production line by spring.