Modular Construction Market Trends and Predictions for 2019

Crane installing structural panel in modular construction job

Cost overruns, slow construction times, and adverse environmental impacts plague conventional on-site construction. Furthermore, conventional construction’s reliance on heavy materials and strict site-specific guidelines hinder its ability to adapt to unexpected events. These challenges, along with increased market pressure and stricter demands from clients, have pushed many building projects to adopt modular construction techniques.

Using modular construction (also known as prefabricated construction), manufacturers construct many prefabricated sections of structures simultaneously at off-site facilities and then transport these parts for assembly on-site. This method dramatically speeds construction time, and the lightweight materials it uses reduce cost and environmental impact.

Perhaps the most significant benefit of modular construction is its flexibility and versatility. Clients can customize modular structures for a wide variety of applications, including office buildings, in-plant offices, homes, conference rooms, security booths, and restrooms.

Modular Construction Still Spreading

Companies and corporations are still discovering the wide range of benefits offered by modular construction. Almost 40% of low-rise office buildings worldwide incorporate modularly constructed elements. However, the home construction sector has been slower to adopt modular construction, having built only 2% of new single-family homes using modular techniques.

Several studies show that the modular construction market will rise in the coming years. In 2017, Markets and Markets showed a $106.15 billion value in the modular construction market. They projected that this value will reach $157.19 billion by 2023, forecasting a compound annual growth rate of 6.9%.

The report attributes this rise to an increased demand for complex structures at affordable rates stemming from the rapid industrialization and urbanization rates of the last 15 years. Additionally, other factors, such as rising construction costs, increased construction activity in emerging economies, and rapid movement toward sustainable construction techniques, further contribute to the popularity of modular construction.

Market Drivers for the Modular Construction Sector

The demand for new housing units and increased investment in the infrastructure sector are perhaps the most significant drivers for the shift to modular construction. Increased spending on construction drives modernization and commercialization, especially in emerging economies.

Other drivers include the desire to move away from inefficient conventional on-site construction methods. Despite technological advancements such as building information modeling (BIM) and collaborative supplier engagement models, many construction projects continue to run behind schedule and over budget. Off-site construction provides a viable alternative by manufacturing several parts simultaneously in controlled environments. This enables a higher degree of quality control and eliminates the unpredictability of on-site construction.

However, modular unit manufacturers still face some significant challenges. Unfamiliarity with the modular construction process remains the most significant impediment to adoption. Modular units must overcome their perceived reputation as fragile or impermanent buildings and continue to demonstrate their ability to hold up against wear and weather. Additionally, modular construction involves many simultaneously occurring processes that move in faster succession than traditional construction, meaning that procurement managers must be on top of their game in securing a wider range of materials in less time. Fortunately, these problems will solve themselves as modular construction practices and specialized support industries continue to spread and as modular construction’s reputation as a viable alternative to traditional techniques continues to grow.

As cities keep expanding worldwide and conventional construction techniques keep failing to deliver, modularly constructed units will increasingly fill the gap. Their cost-effective, speedily constructed, and environmentally efficient qualities ensure that modular buildings will continue to serve as an indispensable part of any architectural project.



Image credit: brizmaker /

A 101 Guide to Cutting Supply Chain CostsNext Story »