Dublin, Dec. 20, 2018 (GLOBE NEWSWIRE) -- The "Modular Construction Market by Type (Permanent, Relocatable), Material (Precast concrete, Steel Wood, Plastic, Others), End-use sector (Housing, Commercial, Education, Healthcare, Industrial), and Region - Global Forecast to 2023" report has been added to ResearchAndMarkets.com's offering.
The author projects that the modular construction market will grow from USD 112.42 billion in 2018 to USD 157.19 billion by 2023, at a CAGR of 6.9%.
Growth in infrastructure investment and industrialization, ease of installation and relocation, and the demand for affordable housing drive the growth of the modular construction market. The housing segment is projected to account for a larger share through 2023. The cost-effectiveness and time-saving characteristics of this technology have contributed toward its use for developing buildings. Furthermore, it offers numerous benefits in terms of quality control, faster build times, greater flexibility and reuse, cost savings, and environmental benefits.
The segmentation for this report is based on type, material, module, end-use sector, and region. Housing is projected to be the fastest-growing end-use sector segment of the modular construction market. In this sector, the demand for modular construction is expected to be driven by the demand for affordable housing with time-saving characteristics. Countries are turning toward the adoption of modular construction methods to meet the rising demand for housing that is eco-friendly and cost-effective due to efficient in-factory processes and reduced waste.
By material, the market has been segmented into steel, precast concrete, wood, plastic, and others. Each material differs from others on the basis of advantages and limitations. In 2017, steel accounted for the largest share of the modular construction market. Design flexibility, strength, structural integrity, durability, security and fire resistance, and reduced need for repairs and maintenance throughout a building's life have contributed toward the extensive use of steel in modular construction.
Permanent modular construction dominated the market in 2017, in terms of value, as a result of the rising need for affordable houses, coupled with the high-quality control in comparison to on-site construction. Permanent modular construction is widely employed in numerous sectors, including residential, office and administrative spaces, K-12 education, retail and hospitality, healthcare, higher education student housing, and publicly-funded facilities.
Asia Pacific dominated the modular construction market in 2017, in terms of value. China contributes a major share to the Asia Pacific modular construction market. Increasing urbanization, increasing demand for buildings at affordable costs, and favorable policies and plans are driving the demand for modular construction in the region. Chinese prefabrication manufacturers are further collaborating with global manufacturers to solve their crisis for houses. For instance, UK's Your Housing Group signed a deal of USD 2.77 billion with the state-owned China National Building Material Company. Under this project, 25,000 new homes would be constructed over the next five years.
Modular Construction Market
Asia Pacific is also projected to be the fastest-growing market for modular construction from 2018 to 2023. The growing demand for better quality construction, shorter construction time, and a safer working environment are some of the factors that are expected to boost the growth of the modular construction market in the region.
Lack of awareness about modular construction and volatility in the transportation charges are the key challenges in the growth of the modular construction market. The global modular construction market is dominated by players such as Laing O'Rourke (UK), Red Sea Housing (Saudi Arabia), ATCO (Canada), Bouygues Construction (France), VINCI (France), Skanska AB (Sweden), Algeco Scotsman (US), KLEUSBERG GmbH & Co. KG (Germany), KEF Katerra (India), and Lendlease Corporation (Australia).
Opportunities
Increase in population and rapid urbanization translating to a large number of new construction projects
The ever-increasing population as well as industrial boom after the economic slowdown has given rise to new constructions, both commercial and residential. Moreover, the migration of rural population to urban areas and the conversion of towns into cities have further fueled the growth rate. According to the Population Reference Bureau, China, India, and other Asia Pacific countries accounted for a combined population exceeding 4.1 billion in 2016, while the Asia-Pacific Human Development Report published by United Nations Development Programme, projects that the total population in Asia Pacific to reach 4.84 billion by 2050, of which 64% is projected to be urban population. This is expected to rise demand for new construction projects, over the next two decades, owing to rapidly rising household incomes and the growing middle-class population. Asia Pacific is projected to witness the highest number of new constructions between 2017 and 2022. The construction spending during this period in China is expected to be 7.3%, by 2020; for India, it is expected to be 7%; while for Vietnam, it is expected to be 6.8% of the global construction spending, according to Asia Construction Outlook survey conducted by AECOM (US). The positive change in living standards and rapid urbanization are expected to shift the inclination of the suppliers and consumers toward modular construction.
Multinationals adopting modular construction
Multinational construction companies have started turning to modular construction to get the projects done owing to its superior benefits in terms of quality control, cost savings, faster build times, and environmental benefits. Quality control is the prime factor that have contributed towards the rising adoption of modular construction by construction companies. Unlike conventional construction techniques, modular structures are built in a factory-controlled environments which eliminates the chances for high levels of moisture being trapped in the new construction and reduces imperfections like lumber warp. Furthermore, modular construction has faster build times which directly reduces build times, due to elimination of weather delays which allows contractors to complete daily build goals. This helps the company to encash the buildings structures in comparatively less time. The increasing adoption of modular construction technique by construction companies creates an opportunity for the growth of modular construction market in the coming years.
Challenges
Lack of awareness
The construction industry is considered to be slow and conservative in adopting innovative and new technologies. The construction sector comprises numerous small suppliers; its R&D budget is also limited in comparison to other sectors. Modular construction market has a positive outlook due to high growth in the construction industry. However, in some developing or underdeveloped countries of the Asia Pacific region as well as in Africa and South America, people are less aware of this construction method and the benefits it offers. People perceive modular buildings to have a shorter life or unable to sustain natural calamities.
There is also lack of awareness about the recyclability of modular buildings in the emerging economies in Africa and South America. For the growth of this industry, it is important to educate customers regarding the positive effects of modular construction on the environment and the way it can contribute to a healthy lifestyle.
Volatility in transportation charges can create an unpredictable business environment
The modular construction industry relies heavily on carriage facilities for the transportation of raw materials from the supplier and to move the modules from the factory to the site of installation. As long as the transportation is available at a reasonable price, the production can be carried out smoothly. However, transportation charges are highly volatile. If the prices rise, the cost of the overall production also increases, as it not only increases the transportation cost of the modules but also raises the raw material cost for the manufacturer, which results in inflated prices of modular buildings for the end users. Thus, volatility in transportation charges leads to an unpredictable business environment in modular construction market.
Companies Mentioned
- Algeco Scotsman
- Alta-Fab Structures
- Art's Way Manufacturing
- Atco
- Bouygues Construction
- Cimc Modular Building Systems Holding
- Clayton Homes
- Dubox
- Fleetwood Australia
- Guerdon Enterprises LLC
- Hickory Group
- Horizon North Logistics
- J.D. Irving
- Kef Katerra
- Kleusberg GmbH & Co. Kg
- Koma Modular
- Kwikspace Modular Buildings
- Laing O'rourke
- Lendlease Corporation
- Modular Space Corporation
- NRB Inc.
- Red Sea Housing
- Skanska AB
- Vinci
- Wernick Group
- Westchester Modular Homes
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