Modular Construction Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Material (Steel, Precast Concrete, Wood, Plastic, Others), By Type (Permanent, Relocatable), By End User (Residential, Retail, Office, Hotel, Education, Others), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 119.69 Billion
CAGR (2026-2031)	5.84%
Fastest Growing Segment	Precast Concrete
Largest Market	North America
Market Size (2031)	USD 168.25 Billion

Market Overview

The Global Modular Construction Market will grow from USD 119.69 Billion in 2025 to USD 168.25 Billion by 2031 at a 5.84% CAGR. Modular construction is defined as a process where building components or modules are prefabricated off-site in a controlled factory environment before being transported to and assembled at the final location. The primary drivers propelling this market include the critical need for accelerated project delivery timelines and the mitigation of acute skilled labor shortages currently affecting the traditional construction sector. Furthermore, the method offers enhanced cost certainty and significant waste reduction, aligning with increasing industrial demands for environmental sustainability and improved project safety profiles.

Despite these distinct advantages, the market faces a significant challenge regarding complex logistics and transportation limitations, as moving large modules often incurs high shipping costs and faces strict dimensional regulations on public infrastructure. Additionally, navigating fragmented building codes across different jurisdictions complicates the standardization necessary for broader efficiency. According to the Modular Building Institute, in 2024, the permanent modular construction market in the United States reached a valuation of $20.3 billion. This figure highlights the sector's substantial economic footprint in major regions, even as it overcomes regulatory and logistical hurdles to expand its share of the broader construction industry.

Key Market Drivers

Rapid urbanization and the escalating demand for affordable housing are compelling governments and developers to adopt construction methodologies that significantly shorten delivery schedules. The ability of modular construction to run site preparation and offsite manufacturing concurrently allows for faster occupancy, directly addressing urgent housing deficits in high-density metropolitan areas. This urgency is reflected in major public sector commitments to accelerate development; according to the Government of Canada, April 2024, in the 'Canada Housing Infrastructure Fund' announcement, a $6 billion investment was pledged to accelerate the construction and upgrading of critical infrastructure needed to support increased density and affordable housing projects. Such substantial financial backing underscores the reliance on rapid building techniques to meet critical population growth requirements.

Simultaneously, the adoption of sustainable and eco-friendly building practices is driving market expansion as stakeholders prioritize environmental stewardship. Controlled factory environments maximize material usage through precision engineering, drastically reducing the volume of debris sent to landfills and lowering the overall carbon footprint of development projects. According to the Modular Building Institute, April 2024, in the '2024 State of the Industry' report, modular projects can achieve waste reduction levels as high as 90% relative to conventional construction methods. This efficiency is increasingly vital as the sector integrates into mainstream housing; according to the National Association of Home Builders, June 2024, systems-built housing accounted for approximately 3% of all single-family completions in the United States, indicating a steady acceptance of these advanced methods.

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Key Market Challenges

Complex logistics and transportation limitations constitute a formidable barrier to the expansion of the Global Modular Construction Market. Unlike traditional building materials that are transported efficiently in bulk, prefabricated modules are voluminous and often exceed standard road dimensional limits. Transporting these large units requires specialized heavy-haul trucking, expensive permits, and intricate route planning to navigate low bridges and narrow infrastructure. These logistical burdens significantly inflate shipping costs, frequently eroding the financial advantages gained through factory-based manufacturing and restricting the economic viability of projects to specific geographic radii around production facilities.

This logistical rigidity creates a ceiling on market scalability, preventing the sector from fully capitalizing on global housing demands. The friction inherent in moving massive components hampers widespread adoption, keeping the method as a niche alternative rather than a primary standard. This struggle for broader integration is evident in recent performance figures. According to the National Association of Home Builders, in 2024, the market share for offsite construction in the single-family sector stood at just 3%. This stagnant adoption rate highlights how logistical constraints effectively limit the industry's capacity to increase its footprint within the broader construction landscape.

Key Market Trends

The expansion of Permanent Modular Construction (PMC) into high-rise and multifamily residential buildings represents a transformative shift from the sector's traditional focus on low-rise structures. Developers are increasingly leveraging volumetric techniques to construct complex, high-density housing, delivering consistent quality and rapid occupancy in urban centers. This vertical growth is substantiated by significant sector adoption; according to the Modular Building Institute, May 2024, in the '2024 Permanent Modular Construction Annual Report', the multifamily housing sector accounted for 20% of all commercial modular market starts in North America. This trend underscores the industry's maturing capability to adhere to stringent structural codes while addressing critical housing shortages through scalable, factory-built solutions.

Simultaneously, the diversification into data center infrastructure is accelerating as the digital economy and artificial intelligence applications demand rapid deployment of processing power. Modular data centers offer a plug-and-play alternative to traditional builds, allowing technology companies to scale capacity swiftly and efficiently across diverse geographies. This surge in specialized industrial demand is prompting major manufacturers to expand their offsite production facilities; according to Schneider Electric, November 2024, in a press release titled 'Schneider Electric Increases Production Capacity at its Largest Data Center Factory in Europe', the company increased the production capacity of its European prefabricated data center factory to 12,000 square meters. The adoption of these prefabricated units ensures predictable performance and faster time-to-market for critical digital infrastructure.

Segmental Insights

The Precast Concrete segment is projected to register the fastest growth within the Global Modular Construction Market due to widespread adoption in infrastructure and affordable housing developments. This expansion is primarily driven by the material's structural durability and its ability to significantly accelerate project timelines compared to traditional methods. Furthermore, rapid urbanization has compelled governments and public sector agencies to prioritize cost-effective building solutions that minimize waste. The shift toward off-site manufacturing ensures consistent quality control, making precast concrete the preferred choice for large-scale residential and commercial construction projects globally.

Regional Insights

North America maintains a leading position in the global modular construction market, driven by rising demand for affordable housing and expanding infrastructure projects. The region faces significant skilled labor shortages, compelling developers to adopt offsite manufacturing to ensure timely project delivery. Government support plays a critical role in this adoption; for example, the Canada Mortgage and Housing Corporation actively promotes modular methods to accelerate affordable housing development through specific funding programs. Additionally, stringent regional building codes focusing on energy efficiency and waste reduction further incentivize the shift from traditional building methods to modular solutions.

Recent Developments

• In November 2024, Webcor announced the launch of a new venture capital entity and its inaugural investment in R2 Building, a modular construction firm based in Oakland. This strategic partnership was established to support the development of a real estate delivery platform that integrates manufacturing with development and general contracting. The collaboration aimed to address industry challenges such as labor shortages and housing affordability by leveraging off-site fabrication methods for high-density projects. The investment reflected a shared vision for the future of industrialized construction and the intent to scale efficient, technology-driven building alternatives in the commercial market.
• In August 2024, Red Sea International signed a definitive contract worth SAR 658 million with Webuild to construct a specialized staff camp for the Trojena dam project at NEOM. The agreement tasked the company with the design, manufacturing, supply, and installation of prefabricated modular buildings, which included residential units and supporting facilities such as dining halls and a medical clinic. This collaboration highlighted the critical role of high-quality modular solutions in supporting large-scale infrastructure developments in Saudi Arabia. The project was scheduled to be executed and delivered in two phases by late 2025 to support the ongoing workforce requirements.
• In August 2024, the venture arm of Saint-Gobain completed a follow-on investment in Volumetric Building Companies to advance global off-site construction capabilities. This financial backing was executed in collaboration with CertainTeed to strengthen a long-term partnership focused on developing and commercializing innovative solutions for the industrialized construction sector. The initiative aimed to combine material expertise with volumetric manufacturing processes to create efficient, sustainable building systems. This strategic move reinforced the commitment of the materials giant to support the growth of modern methods of construction through technical cooperation and shared development goals with specialized modular manufacturers.
• In April 2024, Sekisui House, Ltd. completed the strategic acquisition of M.D.C. Holdings, Inc. to significantly expand its operational footprint within the United States housing market. The transaction aligned with the Japanese corporation's strategy to export its advanced industrialized housing technologies and corporate philosophy to North American customers. Through this integration, the organization aimed to supply 10,000 detached homes in overseas markets by the fiscal year 2025. The deal added substantial unit supply capacity across 16 states, positioning the group to become a top-tier homebuilder in the region while leveraging proprietary manufacturing precision and modular construction methodologies.

Key Market Players

• 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

By Material	By Type	By End User	By Region
Steel Precast Concrete Wood Plastic Others	Permanent Relocatable	Residential Retail Office Hotel Education Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Modular Construction Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• 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
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE