INSIGHT: Modular sector to see boom in commercial work to 2030


Commercial modular construction is expected to be a ‘major market disruptor’ in the coming years, an industry specialist claims. 

The sector is forecast to drive investment and new projects in modular building to 2030, while propping up the wider construction industry in the UK and abroad. 

The Modular Construction Market report, produced by business consulting firm, Grand View Research (GVR), analyses investment, production and application trends in the sector from 2018 to the present day, and attempts to predict market behaviour to the end of the decade.  

And while the residential sector occupied the largest portion of the modular market last year (52.7%) and is expected to be a market leader to 2030, it was the commercial – and indeed industrial – sectors that are predicted to drive new business. 

“In the past few years, the commercial modular construction market has gone mainstream,” said GVR.  

“The recovering economic situations in key markets such as the UK, the US, and Asia are expected to generate robust demand for commercial spaces such as offices, showrooms, and hotels, thus, leading to an increase in commercial building activities.  

“From portable commercial buildings to modular retail stores, [commercial] modular construction holds the potential to disrupt the industry.” 

Key players and market share  

Modular construction enables completion of a project in less than half the time of traditional methods. In times of crisis, like the need for swift healthcare set-ups during the pandemic, this is invaluable. It also enables industries to customise designs and utilise new innovations in style and functionality, and enables firms to reclaim countless man-hours of planning, design and construction, while helping to curb environmental impact.  

Further, as the UK government pushes industry to construct around 300,000 new homes a year to address the housing shortage and population growth, ‘modular construction in the [UK] is increasing, and the top construction firms, investors, and developers are exploring modular solutions’, said GVR. “Modular construction is witnessing rapid adoption in residential applications owing to its ability to significantly reduce building cost and time,” it added. 

Key players in modular construction, like Skanska, Laing O’Rourke, and Bouygues, have adopted various growth strategies, including acquisitions, mergers, contracts, and agreements, to increase their market share and enhance their product and service offering. They are also keen on energy efficiency and customisation to meet specific customer needs. 

Key players in modular construction include:  

  • Sekisui House  
  • Laing O’Rourke 
  • Red Sea International 
  • Skanska 
  • Bouygues Construction 
  • Premier Modular Limited 
  • DuBox 
  • Wernick Group 
  • CIMC Modular Building Systems  
  • Riko Hiše  
  • Lendlease  
  • Modulaire Group 
  • Guerdon 
  • Hickory Group 

And, in May, specialist MMC consultancy, Akerlof, was appointed by the Department for Levelling Up, Housing and Communities (DLUHC) to head up a team of firms to help shape a new Modern Methods of Construction Standardisation Research and Kit-of-Parts project.   

A kit-of-parts typically denotes a collection of building components that are pre-engineered and designed for assembly in a range of ways to create a building.  

Professional services firm, Buro HappoldHLM Architects, and project management specialist, Limberger Associates, are advising Akerlof, with the Offsite Alliance also involved as a stakeholder. 

The focus of the project is MMC Categories 2 (2D primary structural systems) and 5 (non-structural assemblies and sub-assemblies).   

It follows commitments by government set out in the Transforming Infrastructure Performance: Roadmap to 2030 which outlines its vision for innovation and reform in infrastructure delivery, and key policies and guidance for how public works projects and programmes are assessed, procured and delivered in The Construction Playbook.    

Wider modular market view  

The global modular construction market was valued at USD$90.79 billion in 2022. This year, it is valued at USD$96.77 billion and is forecast to see growth of 7.5% to 2030, with projected revenues of USD$162.40 billion. Affordable housing demands, coupled with greater investment in healthcare and commercial infrastructure, as well as urban development, is expected to drive this growth.  

Also, in 2022, Europe was the largest modular market, valued at USD$41.29 billion, driven by migration and housing pressures and high investment in advanced technologies in Germany, Finland, Sweden, and in the UK. 

And while the residential sector accounted for the largest segment of the modular market in 2022 – including single-family houses, multi-story buildings, and rental properties – and is expected to be one of the fastest growing by 2030, it was the commercial and industrial sectors that GVR cast as the darling of the industry to 2030, driving new business and shoring up the health of the construction industry on a global scale. 

“[The] commercial modular construction market was valued at the revenue of USD$11.95 billion in 2022 and is expected to reach USD$21.01 billion by 2030,” said GVR.  

“In the past few years, the commercial modular construction market has gone mainstream.   

“The dynamism of modular construction makes it an ideal option for use across different commercial sectors such as offices, public restrooms and bathrooms, restaurants, and diners.  

“It can also be used for long-term, temporary, or permanent facilities such as temporary retail buildings or offices.” 

Products and materials forecast 

The permanent modular construction (PMC) market in 2022 was valued at USD$58.21 billion, and is expected to grow at a CAGR (compound annual growth rate) of 7.8% to 2030. Relocatable product is expected to grow at a CAGR of 7.0%, as emergency and relief operations gain momentum. 

Huge global investment in modular building technologies like Building Information Modelling (BIM), Artificial Intelligence (AI), Internet of Things (IoT), 3D printing, and real-time data analytics is currently happening, primarily due to cost savings, and are forecast to have a positive impact on market growth to 2030. However, fluctuations in transportation costs could also have a cooling effect. 

Increasing technological advancements in building industry coupled with the advantages provided by modular construction such as reduced building schedule, reduced cost, greater flexibility, reuse, and less material waste are contributing to the product demand,” said GVR. 

Steel emerged as the largest market segment in modular building in 2022, with high revenues from H-type beams, columns, angles, I- beam shapes, and T-shapes, and in relocatable buildings. Wood is expected to see high CAGR to 2030, in substitute of concrete and steel.  

Article sources: Grand View Research – Modular Construction Market: 2023-2030; Allied Market Research – Modular Construction Market: 2021-2031. 

Enjoyed this Insight? Try Construction recruitment is a buyer’s market – and Gen Z have demands 

Get industry news in 5 minutes!

A daily email that makes industry news enjoyable. It’s completely free.