The global modular construction market size is expected to reach USD 174.6 billion by 2025, accelerating at a CAGR of 6.5% over the forecast period, according to a new report by Grand View Research, Inc. Increasing emphasis on improving productivity and rising focus on workplace safety at construction sites are expected to drive the market over the forecast period.
The process involves prefabrication of modules away from the actual site in a controlled environment, resulting in reduced timelines for completing building projects. This process allows planned inventory usage and limited wastage of raw materials, thereby, significantly reducing the investment required for building work. Assembly lines for modular construction help producers streamline raw material purchasing and inventory management.
Modular constructions are monitored regularly, ensuring better quality of final products. Furthermore, they can be easily replaced or recycled during renovation activities, thus, making them more user-friendly. Permanent modular construction segment dominated the industry in Sweden and accounted for 69.1% of the overall market share in 2018 owing to increased demand for residential wooden housing structures in the region.
The industry players are expected to target developing economies such as India, China, and Southeast Asian countries to tap robust opportunities resulting from rapid growth of building sector. Increasing efforts by companies to adopt the latest technologies such as 3D printing and building information modeling (BIM) for optimizing offsite module construction activities are expected to have a positive impact on the industry growth. However, fluctuation in transportation cost is anticipated to hamper the market growth over the forecast period.
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Further key findings from the report suggest:
- In Asia Pacific, residential application is expected to progress at a CAGR of 6.9% over the forecast period. This growth can be attributed to the growing population, which, in turn, demands high investment for development of residential housing projects
- In India, modular construction in healthcare application segment was valued at USD 809.5 million in 2018 on account of high budgetary outlay for the development of healthcare infrastructure by public and private investors
- The U.S. accounted for 79.3% of the regional market in 2018, owing to rising adoption of eco-friendly building practices by companies in the Americas
- Commercial modular construction segment in Asia Pacific accounted for USD 7.34 billion in 2018, due to rising investments for establishment of offices, hotels, and restaurants.