Modular Construction Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Modular Construction Market is projected to expand from USD 119.69 Billion in 2025 to USD 168.25 Billion by 2031, achieving a CAGR of 5.84%. This construction methodology entails prefabricating building modules or components in a controlled off-site factory setting before transporting them to the final site for assembly. Key factors driving this market's growth include the urgent necessity for shortened project timelines and the need to address the severe shortage of skilled labor impacting the conventional construction industry. Additionally, modular methods provide greater cost predictability and substantial reductions in waste, satisfying growing industrial requirements for enhanced safety standards and environmental sustainability.

Despite these benefits, the sector encounters major obstacles related to complex logistics and transportation restrictions, as shipping large modules frequently involves high costs and strict adherence to public infrastructure dimensional rules. Furthermore, the lack of standardized building codes across various jurisdictions hinders broader efficiency and complicates regulatory compliance. According to the Modular Building Institute, the permanent modular construction sector in the United States achieved a valuation of $20.3 billion in 2024. This data underscores the industry's significant economic impact in key regions, even as it navigates logistical and regulatory challenges to increase its presence within the wider construction market.

Market Drivers

Increasing urbanization and the growing need for affordable housing are pushing developers and governments toward construction methods that drastically reduce project durations. Modular construction facilitates simultaneous site preparation and offsite manufacturing, leading to faster building occupancy and directly tackling acute housing shortages in dense metropolitan regions. This necessity is highlighted by significant public sector investments; for instance, the Government of Canada announced in April 2024, under the 'Canada Housing Infrastructure Fund', a pledge of $6 billion to expedite the creation and upgrade of essential infrastructure required for affordable housing and increased density. Such major financial commitments emphasize the dependence on rapid construction techniques to satisfy essential population growth demands.

Concurrently, the shift toward eco-friendly and sustainable building practices is fueling market growth as stakeholders emphasize environmental responsibility. Factory-controlled settings optimize material use through precise engineering, significantly lowering the carbon footprint of development projects and reducing debris sent to landfills. According to the '2024 State of the Industry' report by the Modular Building Institute in April 2024, modular projects can decrease waste by up to 90% compared to traditional methods. This efficiency is becoming vital as the method gains traction in mainstream housing; the National Association of Home Builders noted in June 2024 that systems-built housing represented roughly 3% of all single-family completions in the United States, signaling steady acceptance of these advanced techniques.

Market Challenges

Transportation limitations and complex logistics present a significant obstacle to the Global Modular Construction Market's growth. In contrast to traditional building materials that are easily transported in bulk, prefabricated modules are voluminous and frequently surpass standard road dimensional restrictions. Moving these substantial units necessitates specialized heavy-haul transport, costly permits, and careful route planning to avoid narrow infrastructure and low bridges. These logistical requirements drastically increase shipping expenses, often diminishing the financial benefits of factory-based production and confining the economic feasibility of projects to limited geographic areas near manufacturing plants.

This logistical inflexibility places a cap on market scalability, hindering the sector from fully addressing global housing needs. The friction involved in transporting massive components restricts widespread adoption, keeping modular construction as a niche option rather than a primary industry standard. This difficulty in achieving broader integration is reflected in recent market data; according to the National Association of Home Builders, the market share for offsite construction within the single-family sector remained at only 3% in 2024. This flat adoption rate demonstrates how logistical barriers effectively constrain the industry's ability to expand its influence within the wider construction environment.

Market Trends

The evolution of Permanent Modular Construction (PMC) into multifamily and high-rise residential sectors marks a significant departure from the industry's historical emphasis on low-rise buildings. Developers are increasingly utilizing volumetric methods to build high-density, complex housing that offers rapid occupancy and consistent quality in urban environments. This shift toward vertical construction is supported by substantial industry adoption; the Modular Building Institute's '2024 Permanent Modular Construction Annual Report' from May 2024 indicates that the multifamily housing sector comprised 20% of all commercial modular market starts in North America. This trend highlights the sector's advancing ability to meet strict structural codes while solving critical housing deficits with scalable, factory-produced solutions.

At the same time, the market is diversifying into data center infrastructure, driven by the digital economy and artificial intelligence applications requiring rapid processing power deployment. Modular data centers provide a plug-and-play alternative to conventional construction, enabling technology firms to quickly and efficiently scale capacity across various locations.

This increase in specialized industrial demand is encouraging leading manufacturers to grow their offsite production capabilities; for example, Schneider Electric announced in a November 2024 press release titled 'Schneider Electric Increases Production Capacity at its Largest Data Center Factory in Europe' that it had expanded its European prefabricated data center factory's capacity to 12,000 square meters. Adopting these prefabricated units guarantees faster time-to-market and predictable performance for essential digital infrastructure.

Key Players Profiled in the Modular Construction Market

• ACS Group
• Skanska AB
• Taisei Corporation
• Lendlease Corporation
• Balfour Beatty PLC
• L&T Group
• ATCO Ltd.
• Modulaire Group Holdings Limited
• Red Sea International Company
• VINCI SA

Report Scope

In this report, the Global Modular Construction Market has been segmented into the following categories:

Modular Construction Market, by Material:

• Steel
• Precast Concrete
• Wood
• Plastic
• Others

Modular Construction Market, by Type:

• Permanent
• Relocatable

Modular Construction Market, by End User:

• Residential
• Retail
• Office
• Hotel
• Education
• Others

Modular Construction Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Modular Construction Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

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