The global modular construction market was valued at USD 90.79 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 7.5% throughout the forecast period. This growth is primarily driven by the increasing demand for affordable housing and the rising investments in healthcare and commercial infrastructure development across the globe. Additionally, the growing trend of off-site construction in urban areas is significantly boosting the modular construction market. Off-site construction involves building components in a controlled factory setting, reducing the impact of weather delays. These factories use advanced machinery to manufacture the parts, ensuring a high level of precision and quality. As a result, construction timelines are shortened, and waste generated on-site is minimized. The efficiency and quality control offered by off-site building make modular construction an attractive and cost-effective option.
The rapid pace of urbanization and industrialization worldwide is expected to lead to a rise in the number of new construction projects, particularly within the commercial and industrial sectors. This surge in demand is likely to fuel growth in the global construction industry as a whole. In addition, advancements in technology within the building sector, combined with the many benefits of modular construction, such as shorter building timelines, cost reductions, greater flexibility, opportunities for material reuse, and reduced waste, are further driving the adoption of modular solutions.
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Material Segmentation Insights
Among the various materials used in modular construction, steel has emerged as the largest market segment, generating revenue of USD 37.69 billion in 2022. Steel is commonly used in a variety of forms, such as H-type beams, columns, angles, I-beams, and T-beams. This material is valued for its outstanding mechanical and chemical properties, including high strength, durability, ductility, ease of fabrication, seismic resistance, and rapid assembly. Steel is often used as a reinforcement material in concrete to compensate for the concrete's relatively low tensile strength.
Pre-engineered steel structural solutions are particularly popular for large open spaces and are widely used in commercial and industrial applications. Steel frames are lighter than many other building materials, making them easier to transport and lift using cranes. This results in a more efficient construction process, minimizes disruption to the local environment, and helps lower costs. Additionally, steel is recyclable, which allows for the dismantling and reuse of steel components, contributing to sustainability. As a result, steel is a popular choice for relocatable buildings, such as commercial structures, warehouses, and retail outlets.
The wood segment is expected to grow at a CAGR of 7.4% from 2023 to 2030. One of the key reasons for this growth is the increasing use of mass timber as a sustainable alternative to concrete and steel. Mass timber offers a solution to reducing greenhouse gas emissions in the construction industry while maintaining the durability and performance of traditional building materials. Though lighter than steel and concrete, mass timber exhibits similar strength, durability, and seismic resilience.
Timber has become a prominent material in the modular construction industry over the past decade. Its excellent properties, such as high durability, light weight, and low toxicity, make it a favored option for building. Additionally, timber is biodegradable, easy to recycle, and reusable, which further contributes to its growing demand in modular construction. The material’s sustainable nature is expected to drive its adoption in the coming years as the construction industry increasingly focuses on eco-friendly practices and reducing environmental impact.
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