#modularconstructionmarket

 Meticulous Research®—a leading global market research company, published a research report titled, ‘Modular Construction Market Size, Share, Forecast, & Trends Analysis by Product (Permanent, Relocatable), Method (Closed, Open), Material (Wood, Steel, Concrete), Application (Residential, Commercial, Industries, Healthcare) - Global Forecast to 2032’

According to this latest publication from Meticulous Research®, the global modular construction market is projected to reach $189.1 billion by 2032, at a CAGR of 6.9% from 2025 to 2032. The growth of this market can be attributed to several factors, including cost-efficient installation, lack of availability of skilled labor, and the need for faster execution of projects. Additionally, the increasing urbanization, the need to address the global affordable housing crisis, and the increasing focus on sustainable building practices are expected to create market growth opportunities. However, the perception that modular construction is limited to commercial projects may restrain the growth of this market. However, manufacturing and transportation restrictions are a major challenge for the players operating in this market.

Additionally, the integration of digital technologies, automation, robotics, and artificial intelligence (AI) is a key trend in the modular construction market.

The global modular construction market is segmented by product, method, material, and application. The study also evaluates end-user industry competitors and analyzes the market at the region/country level.

Based on product, the global modular construction market is broadly segmented into permanent modular construction (PMC) and relocatable modular construction (RMC). In 2025, the permanent modular construction segment is expected to account for the larger share of ~65.0% of the modular construction market. The large market share of this segment can be attributed to the growing need for controlled manufacturing conditions in factory settings, the growing use of PMC in industrial buildings such as warehouses, manufacturing facilities, and distribution centers, the increasing use of PMC for constructing various types of residential buildings, including single-family homes, multi-family housing complexes, and apartment buildings.

However, the relocatable modular construction segment is projected to witness a higher growth rate during the forecast period of 2025–2032. This growth is driven by the growing demand for temporary facilities on construction sites, including offices, break rooms, storage units, and restroom facilities, the increasing use of RMC for emergencies to provide temporary shelters and medical clinics, and the growing utilization of RMC for temporary retail spaces, pop-up stores, and promotional booths in shopping centers.

Based on method, the global modular construction market is broadly segmented into closed modular construction and open modular construction. In 2025, the closed modular construction segment is expected to account for the larger share of the modular construction market. The large market share of this segment can be attributed to the growing demand for high-quality buildings with minimal variability, the increasing need to lower overall project costs due to reduced material waste and minimized on-site labor requirements, growing use of closed modular construction in the construction of commercial buildings and residential buildings, and increasing need to avoid project schedules and minimizes project downtime due to weather-related delays.

However, the open modular construction segment is projected to witness a higher growth rate during the forecast period of 2025–2032. This growth is driven by the increasing demand for flexibility in design and customization options that allow developers to create dynamic and integrated urban environments, as well as the increasing use of open modular construction in the construction of public spaces and cultural buildings such as parks, plazas, museums, theaters, and recreational facilities.

Based on material, the global modular construction market is broadly segmented into wood, steel, concrete, and other materials. In 2025, the steel segment is expected to account for the largest share of ~43.0% of the modular construction market. The large market share of this segment can be attributed to its benefits including strength-to-weight ratio, flexibility in design and construction, and recyclability that make it ideal for constructing robust and long-lasting modular structures. The segment is also projected to witness the highest growth rate during the forecast period of 2025–2032. This growth is driven by the increasing use of steel in the construction of commercial buildings, manufacturing facilities, and distribution centers due to its strength, durability, consistent quality, and precision in fabrication that results in high-quality modular components.

Based on application, the global modular construction market is broadly segmented into residential properties, commercial spaces, hospital/clinics/medical facilities, education & institutional, government & public sector, aerospace & defense, and other applications. The commercial spaces segment is further segmented into office buildings, hotels, retail, and logistics/warehouse. In 2025, the residential properties segment is expected to account for the largest share of ~56.0% of the modular construction market. The large market share of this segment can be attributed to the growing demand for modular construction, the cost-effective and efficient housing solutions for homeowners, the increasing demand for temporary modular shelters to offer safe and secure accommodations in response to natural disasters and other crises, the growing demand for urban housing, and the increasing need to address housing shortages and affordability challenges. The segment is also projected to witness the highest growth rate during the forecast period of 2025–2032.

Based on geography, the global modular construction market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2025, North America is expected to account for the largest share of ~40.0% of the modular construction market, followed by Europe, Asia-Pacific, Latin America, and the Middle East & Africa. North America's significant market share can be attributed to several key factors, including the increasing technological advancements to streamline production processes, improve efficiency, and enhance quality control in modular construction projects; shortage of skilled labor; increasing demand for scalable and efficient modular spaces to meet the housing and infrastructure needs of growing urban populations; and growing emphasis on sustainability solutions to reduce construction waste, minimize site disturbance, and optimize energy efficiency in the region.

However, the market in Asia-Pacific is slated to register the highest growth rate of ~8.5% during the forecast period. The growth of this regional market is attributed to the region’s rapid urbanization, increasing need for cost-effective and scalable solutions to build affordable housing units and meet the needs of growing populations, and increasing government initiatives for the development of smart cities, affordable housing projects, and infrastructure upgrades.

Key Players:

The key players operating in the modular construction market are ATCO Ltd. (Canada), Guerdon, LLC (U.S.), Skanska AB (Sweden), Bouygues Construction (France), KLEUSBERG GmbH & Co KG (Germany), Lendlease Corporation (Australia), Red Sea International (Saudi Arabia), Bechtel Corporation (U.S.), Honomobo (Canada), WillScot Mobile Mini Holdings Corp. (U.S.), SG Blocks, Inc. (U.S.), Speed House Group of Companies (UAE), CIMC Modular Building Systems Holdings Co., Ltd. (China), Wernick Group (Holdings) Ltd. (U.K.), Giant Containers Inc. (Canada), Premier Modular Limited (U.K.), and LAING O'ROURKE (U.K.).

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Key questions answered in the report-

·  Which are the high-growth market segments based on product, method, material, application, and geography?

·  What was the historical market for the modular construction market?

·  What are the market forecasts and estimates for the period 2025–2032?

·  What are the major drivers, restraints, opportunities, and challenges in the modular construction market?

·  Who are the major players, and what shares do they hold in the modular construction market?

·  What is the competitive landscape like in the modular construction market?

·  What are the recent developments in the modular construction market?

·  What are the different strategies adopted by the major players in the modular construction market?

·  What are the key geographic trends, and which are the high-growth countries?

·  Who are the local emerging players in the global modular construction market, and how do they compete with the other players?

The construction industry is facing a significant predicament- a shrinking labor force. Recent data indicate that nearly 200,000 construction jobs in the United States are vacant, with projections indicating that this number will rise in the future [Source: U.S. Bureau of Labor Statistics]. The repercussions of this labor shortage are vast and multifaceted, affecting not just project timelines but also the quality of the work and the cost of projects.

Amid this crisis, one innovative approach is gaining traction- modular construction. This technique could offer a practical solution to the labor shortage problem plaguing the construction industry. According to Inkwood Research, the global modular construction market is set to accelerate with a 6.68% CAGR, generating an estimated $73.10 billion during the forecast period 2023-2032.

Understanding the Power of Modular Construction in Mitigating Labor Shortage

Modular construction involves manufacturing parts of a structure (modules) in factories, which are then transported to the job site for assembly. This method offers several potential benefits that can help mitigate the labor shortage issues:

Efficient Use of Labor: Workers must be present at various job sites in traditional construction methods, often leading to inefficient labor use. Modular construction allows work to happen where the workers are – in factories. This can ensure a consistent flow of projects, keeping workers busy, with a single facility capable of employing an average of 100 or more workers per shift [Source: Z Modular].

Tandem Work: With modular construction, work at the factory and on-site can occur simultaneously [Source: Modular Building Institute]. This concurrent process effectively utilizes two labor pools simultaneously, significantly expediting project completion times. According to the S. Department of Energy, this parallel construction approach can potentially reduce construction time. This time efficiency contributes to financial efficiency by minimizing overhead costs and allows for quicker project delivery, enabling businesses to capitalize on their investment sooner [Source: NREL- The U.S. Department of Energy]. According to the Modular Building Institute, facilities employing modular construction methods can reduce construction time by 30% to 50% [Source: Modular Building Institute].

Reduced Transportation Costs: The cost of transporting modules to job sites is typically less expensive than relocating teams of workers. Savings on labor can thus vary by up to 25% on construction costs [Source: RealProjectives]. Moreover, facilities that produce these modules are usually strategically located near major transportation networks (highways, railways, or waterways) for ease of transit [Source: National Institutes of Standards and Technology]. This strategic placement could lead to significant savings in project costs.

Efficiency and Quality: Modular construction reduces labor needs and addresses issues of project delays and quality control commonly associated with traditional construction [Source: McKinsey]. By applying lean principles and automation, modular construction can produce the same amount of work with approximately 10% fewer workers [Source: Z Modular]. This optimized efficiency can lead to significant cost savings. A study by McKinsey found that modular construction can boost productivity up to ten times while reducing costs by 20% [Source: McKinsey].

Worker Satisfaction: Modular construction offers an appealing work environment, unlike traditional construction work. Workers enjoy regular paychecks, opportunities for career advancement, a climate-controlled work environment, ensured job safety, less travel or relocation for work, and technically sophisticated work, including high-value insurance coverage [Source: Panel Built Incorporated]. These benefits make modular construction more attractive to younger generations entering the job market.

Future with Modular Construction

The labor shortage crisis in the construction industry presents substantial challenges, but innovative solutions like modular construction offer promising potential for resolving these issues. By ensuring efficient use of labor, reducing costs, and improving quality, modular construction addresses labor shortages and enhances the construction industry’s overall productivity and profitability.

However, to unlock the full potential of modular construction, significant investment in technology, training, and policy reforms is necessary. Government policies, like those advocated by the National Association of Home Builders, that support modular construction can create a conducive environment for this method to thrive.

Market Overview