What can Global and UK Stats Tell Us About Modular Construction?

Posted by Thurston Group on 22nd November 2022 -

In 2021, the global modular construction market was valued at around US$137.8 billion. By 2030, it’s expected that this sector will grow to be worth US$271 billion, according to the Global Modular Construction Industry Report.

In terms of regional market share, Europe is the second biggest, valued at US$33 billion in 2021 with the expectation of growth to US$49 billion by 2030. It’s clear from statistics like these that the global modular construction market is growing fast.

Benefits of modular construction around the world

Modular buildings are more efficient, more cost effective and more flexible than traditional building solutions. We are able to use the highest performance materials, adjust design and scope to the exact needs of the client and then construct 90% of the building off site, all of which is beneficial for the client.

These lower costs and comparatively shorter building time spans for projects are contributing towards the growth of the market. And given that the end result is durable and needs relatively low ongoing maintenance, modular construction also answers the call for high performance structures over the long term.

As the demand for new buildings continues to rise around the world, particularly in urban areas, modular buildings will continue to become more popular. When cities grow quickly, the demand for housing, infrastructure, education and healthcare grows too.

Modular construction can be utilised across all of these sectors, at the same time slashing the time it takes to deliver much-needed solutions and ensuring sustainable building practices and materials too.

Investment in modular construction is increasing

Between 2014 and 2025, it’s estimated that globally around US$78 trillion will be spent on building projects and building infrastructure. Investment is increasing just about everywhere, but particularly in developing countries.

As more people move towards living and working in major cities across Japan, China, Mexico and India, for example, the more investment opportunities there are for modular construction.

Globally, the market can be divided into three – Europe, North America and Asia-Pacific. Right now, Asia Pacific remains the biggest and is likely to continue to dominate the others.

Furthermore, it’s the permanent segment of the modular construction industry that is dominating growth around the world. In 2021, this was valued at US$87 billion and by 2030 is expected to grow to US$148 billion. This underscores the reliability of modular construction as a permanent building solution for major infrastructure, housing, offices and much more.

Fast growth of the modern modular construction sector

The development of the global market for modular construction has been swift and decisive. In 2011, one of the most impressive projects in this sphere at the time was in China, when a prefab manufacturer built a 30 storey hotel in just over two weeks. Four years later, the same company built a 57 storey building in 19 days. This meant a build rate of three floors of the skyscraper every single day!

COVID-19 accelerated the growth of the sector too. For example, in 2020 the Huoshenshan Hospitalwas built in Wuhan, China in just under ten days to provide solutions for the unfolding crisis.

These amazing achievements in construction have led to an increase of interest in the whole process of modular construction. For example, the process of building the  hospital mentioned above was watched by millions on YouTube as a feat of miracle engineering.

Quality and flexibility are driving interest

Of course, these modular construction methods aren’t new – at Thurston, we’ve been working in this industry for more than 50 years. But the adoption and use cases for modular construction are changing as the industry accelerates the need for change.

Before 2022, modular offsite construction of structures and building elements accounted for around 2% of the global construction market. However, we are now in the middle of a boom period for the industry, as the need for fast, reliable, cost effective and sustainable building practices increases around the globe.

In the UK, there is now significant investment interest in modular construction for economic purposes. Modular and offsite construction can give a competitive edge to companies looking for innovative building solutions and can vastly improve the construction sector’s ability to meet demand following the temporary slowdown in projects during the height of the covid19 pandemic.

Global and UK modular construction sectors will grow

Offsite manufacturing systems has continuously increased in quality, flexibility and longevity over the last 20 or so years. While modular construction that was once considered only a temporary solution, has now moved beyond this into the provision of high quality, specifically designed and serviced buildings for just abut every sector.

Prices are rising for raw materials and labour and, while these are unlikely to change, the fact remains that the UK needs to continue building. And this is where project managers are increasingly looking for different ways to approach the same challenges – and of course, they’re turning to modular construction.

At Thurston, we expect to see offsite manufacturing to continue to grow in popularity and influence, now it’s mandated along with guidance notes on MMC within the Governments Construction Playbook we can see particularly in the new-build market in the UK. In April 2021, a report from Savills showedthat up to 10% of new homes were being built by modern modular construction methods.

Since then, this has increased and will continue to do so. For example, the Homes England programme aims to make 25% of affordable homes using modular construction methods.

Modular construction methods offer cost effective sustainability

Now that concerns over build quality are demonstrably no longer relevant, modular construction offers the kind of solution that an under pressure sector needs in 2022. The world is facing a plethora of geopolitical challenges, none of which are conducive to slow, outdated, wasteful construction techniques.

This is why we’re seeing modular construction taking off in housing, for healthcare, for offices and for education. From restaurants to mobile testing units at hospitals, and from student accommodation to new build family homes, the use cases for modular construction are expanding all the time.

Cost effective efficiency, sound design practices, flexibility and high quality regulated building means offsite modular construction is the obvious solution for the future of construction in 2022 and beyond.

 

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