Modular Construction Market Size In US is set to grow by USD 5.64 billion from 2023-2027, On-site constraints boost the market, Technavio

NEW YORK, July 23, 2024 /PRNewswire/ -- The modular construction market size in US is estimated to grow by USD 5.64 billion from 2023-2027, according to Technavio. The market is estimated to grow at a CAGR of  5.61% during the forecast period. On-site constraints is driving market growth, with a trend towards increasing awareness of custom-built facilities with minimum budgets. However, volatile input cost  poses a challenge. Key market players include Abtech Inc., ATCO Ltd., Bechtel Corp., Black Diamond Group Ltd., Building Pro, Commercial Structures Corp., Fluor Corp., GUERDON LLC, JL Construction, Kwikspace Pty Ltd., Lendlease Corp. Ltd., McGRATH RENTCORP, Modular Genius, Nadler Modular, Pac Van Inc., Satellite Shelters Inc., Skanska AB, Specialty Modular, STARRCO, and Westchester Modular Homes.

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Market Driver

Modular construction is gaining popularity in the US due to its cost-effective solution for constructing residential complexes. Notable projects, such as the Homeless Housing in Hilda L.Soil, Los Angeles, which provided 553,000 housing units in April 2021, are proof of its effectiveness. This construction method offers flexibility to contractors and is environmentally friendly, as major components can be reused and relocated without requiring new resources. The increasing recognition of modular construction's benefits for custom facility construction is anticipated to fuel market growth in the US during the forecast period. 

Modular construction is a growing trend in the US building industry, offering several advantages over traditional methods. This approach involves creating standardized modules in factory conditions, resulting in shorter project completion times, improved quality control, and reduced material waste and energy consumption. Modular construction is being adopted for various types of buildings, including residential homes, commercial spaces, educational facilities, and healthcare centers. Sustainability, workplace safety, and precision manufacturing techniques are key focus areas. The benefits extend to resource utilization, reduced carbon emissions, and addressing transportation and assembly issues. Modular construction is being used for housing projects, infrastructure development, and luxury developments in urban environments. However, challenges include a lack of expertise and specialized knowledge in the industry, requiring a focus on design, logistics, and on-site assembly. State-level administrative agencies play a crucial role in ensuring compliance with safety regulations and facilitating the adoption of modular construction work in different construction segments. 

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Market Challenges

• The modular construction market in the US is influenced by the cost of raw materials, which can fluctuate due to various factors such as inflation, supply and demand, and availability. Key providers in this industry enter into long-term contracts with suppliers to mitigate the impact of price volatility in materials like stainless steel, iron, steel, and concrete. However, this volatility directly affects vendors' contracts and overall fabrication costs. For instance, benchmark steel prices decreased by approximately 17% in March 2022 compared to 2021, but have since risen to over USD650 in December. Such price instability may hinder the growth of the modular construction market in the US during the forecast period.
• The Modular Construction market in the US is experiencing growth in various sectors, including healthcare and urban areas. Cities facing severe housing shortages are turning to modular building solutions for quicker and more cost-effective construction. Players like Aries Building Systems, VESTA Modular, and BD Modular Solutions have a significant share in this market. Seattle and Vancouver are key markets for modular construction, with cities in Dallas, Texas, also adopting this trend. Modular construction uses computer-aided design and building information modeling for off-site building. Challenges include healthcare markets' unique requirements and natural disasters like hurricanes, floods, wildfires, and earthquakes. Permanent modular construction and relocatable modular construction are popular options. Steel, timber, and modular concrete structures are used in both residential and commercial applications. The Modular Building Institute provides education and advocacy for this industry. Cash purchase price and free cash flow are essential factors for modular construction projects. Design Space, with its branches and employees, is a key player in the modular construction industry.

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Segment Overview 

This modular construction market in US report extensively covers market segmentation by  

1. Application 
• 1.1 Residential
• 1.2 Commercial
2. Type 
• 2.1 Permanent
• 2.2 Relocatable
3. Geography 
• 3.1 North America

1.1 Residential-  The US modular construction market is poised for growth due to population expansion and increasing urbanization. According to the World Bank, the US population grew by 0.1% in 2021, fueling demand for new residential units. The benefits of modular construction, such as time savings and quicker returns on investment, are driving its adoption. Industrialized assembly and concurrent site preparation enable significant time reductions. Modular construction is ideal for manufacturing turnkey homes that comply with local, state, and federal building codes in rural and suburban areas. The need for affordable housing and thermal insulation, as well as faster house construction durations, are key market growth drivers. Additionally, natural disasters like hurricanes, which destroyed numerous residential buildings in 2021, have increased the demand for new construction.

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Learn and explore more about Technavio's in-depth research reports

The Spanish construction market is driven by infrastructure development and residential projects. Globally, the modular cleanroom market is expanding rapidly fueled by advancements in pharmaceutical and semiconductor industries. Meanwhile, the dry construction market is also on the rise, with a global value expected to exceed $300 billion by 2026, as demand for efficient and sustainable building solutions continues to grow.

Research Analysis

Modular construction, also known as off-site building, is a modern approach to traditional permanent construction. It involves manufacturing standardized modules in a factory under controlled conditions, using computer-aided design and building information modeling. These modules are then transported to the construction site and assembled, significantly reducing project completion times. Urban areas are increasingly turning to modular construction due to its efficiency and ability to withstand natural disasters such as hurricanes, floods, wildfires, and earthquakes. Modular construction offers permanent solutions, with the same durability and quality as traditional permanent construction. The use of modular construction extends beyond urban areas and residential homes. It is also being adopted for commercial buildings, educational facilities, airports, construction site offices, and even single-family homes. State level administrative agencies and compliance bodies are recognizing the benefits of modular construction and implementing regulations to encourage its use. Compared to traditional building methods, modular construction offers several advantages, including improved quality control, reduced material waste, and lower energy consumption. The factory conditions allow for precise manufacturing and rigorous quality checks, ensuring a consistent final product. Additionally, the use of standardized modules allows for easier compliance with regulations and codes.

Market Research Overview

Modular construction, also known as off-site building, is a modern approach to traditional construction where standardized modules are manufactured in factories using computer-aided design and building information modeling. This method is gaining popularity in urban areas due to its efficiency and ability to reduce project completion times, especially in the face of natural disasters such as hurricanes, floods, wildfires, and earthquakes. Modular construction can be permanent or relocatable, with materials ranging from steel, timber, to modular concrete structures. Applications include residential homes, commercial buildings, educational facilities, and healthcare centers, among others. The use of precision manufacturing techniques and resource utilization leads to improved sustainability, workplace safety, and reduced material waste and energy consumption. However, challenges include transportation issues, assembly, and a lack of experts with specialized knowledge and skills in modular construction work. The built environment is evolving, with construction projects in various segments, including housing, infrastructure, and commercial spaces, adopting this innovative approach. In the US, states like Massachusetts and Pennsylvania have programs promoting industrialized buildings, including manufactured buildings and multifamily units. The industry output is diverse, with applications ranging from affordable housing and luxury developments to modular hotels, such as those built for international brands like Marriott. Despite the benefits, challenges remain, including compliance with safety regulations and addressing concerns related to carbon emissions.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Application
• Residential
• Commercial
• Type
• Permanent
• Relocatable
• Geography
• North America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: [email protected]
Website: www.technavio.com/

SOURCE Technavio

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