Modular Construction Market Analysis US - Size and Forecast 2024-2028

US Modular Construction Market Size 2024-2028

The US modular construction market size is forecast to reach USD 7.37 billion at a CAGR of 6.78% from 2023 and 2028. The growth of the market is driven by several key factors, including the rise in construction and infrastructure development activities, the improving aesthetics, quality, and energy efficiency of building materials, residential construction, and the on-site constraints that necessitate innovative solutions. The market is also witnessing a shift towards innovative building methods like off-site building and modular construction, which are gaining popularity due to their cost efficiency, speed of installation, and sustainability, often utilizing materials like timber that offer advantages such as durability, lightweightness, and low toxicity, further contributing to their appeal in the construction industry and research. As the demand for sustainable, efficient, and aesthetically pleasing building solutions continues to grow, the market is poised for expansion, with manufacturers and construction professionals adapting to meet the evolving needs of the industry.

What will be the Size of the US Modular Construction Market During the Forecast Period?

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US Modular Construction Market Segmentation

The US modular construction market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments

• Application Outlook 
  • Residential
  • Commercial

• Type Outlook
  • Permanent
  • Relocatable

By Application

The growth of the residential segment will be significant during the forecast period. The residential segment was the largest segment of the market in US in 2022. According to the World Bank, US population growth increased by 0.1% in 2021 compared to 2020. Increased urbanization has increased the demand for new residential units.

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The residential segment was valued at USD 9.55 billion in 2018 and continued to grow until 2022. Apart from that, benefits such as time savings and quick return on investment are the main benefits of building. The modular design allows industrialized assembly at the same time as site preparation, thus significantly reducing the total time required to build the structure. They can be used to easily manufacture turnkey homes that meet local and suburban, state, and federal building codes. Hence, such factors are fuelling the growth of this segment during the forecast period.

By Type

The type segment includes permanent and relocatable. The buildings is transforming the sector into highly efficient and environmentally friendly ways to build structures that are more durable, stronger, and more predictable. A sustainable and cutting-edge technology called permanent modular construction (PMC) prefabricates single or multi-storey homes with components using lean manufacturing techniques and off-site manufacturing, driving the popularity of prefabricated buildings. PMC enables faster service, saving costs and time. Permanent structures are constructed using off-site construction methods for residential and non-residential homes and prefabricated parts of building elements. PMC enables faster design at a lower cost. It is mainly used in hotels, schools, and restaurants. Hence, these factors are fueling the growth of this segment during the forecast period.

US Modular Construction Market Dynamics

The market is rapidly evolving, driven by urban areas facing housing shortages and the demand for efficient construction solutions. Modular building methods, utilizing standardized modules in factory conditions, are revolutionizing project completion times while minimizing material waste and energy consumption. This approach finds applications across residential homes, commercial buildings, educational facilities, and healthcare centers, emphasizing workplace safety, state level and precision manufacturing techniques. As the construction industry embraces off-site building methods, it is expected to grow, offering advantages over traditional building methods in terms of quality, efficiency, and sustainability. Governments and international organizations are promoting off-site building through initiatives that encourage the use of alternative building methods and support disaster relief efforts with relocatable and refabricated homes. Our researchers studied the data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market.    

Key Market Driver

On-site constraints drives US modular construction market growth. Buildings constructed in the twentieth century typically utilized low-quality materials and lacked many features present in conventionally built homes. Consequently, they were predominantly utilized by individuals of lower economic means. However, the enhanced build quality, rigorous design and inspection processes, and the availability of extensive customization options now draw numerous homebuyers toward modular construction. Currently, structures employing modular construction techniques are manufactured within tightly controlled environments, emphasizing quality and design standards.

Moreover, this approach helps alleviate common issues encountered during the construction of traditionally built homes. Many modern modular-constructed buildings are considered superior to conventional homes in numerous aspects. Most adhere to either the US Housing and Urban Development (HUD) Code or the International Residential Code (IRC), ensuring safety and durability. The advancements in the quality and efficiency of prefabricated buildings are altering consumer perceptions of prefabricated construction, prompting many to opt for prefabricated buildings over traditional brick-and-mortar structures. Prefabricated construction and digital software streamline processes, mitigating on-site assembly errors. These factors are expected to drive up the demand, subsequently boosting US modular construction market growth during the forecast period.

Significant Market Trends

Increasing awareness of custom-built facilities with minimum budgets|New product launches is a primary trend in the market. It offers contractors flexibility and is environmentally friendly, as key construction components are reusable and can be relocated without the need for new resources. The growing awareness of the advantages in custom facilities is projected to drive the expansion of the market over the forecast period.

Moreover, the promising growth prospects of the market in the US are prompting vendors to engage in strategic partnerships and acquisitions to broaden their customer base and market presence. Consequently, market players are executing acquisition strategies. For instance, in February 2023, McGRATH RENTCORP acquired Vesta, facilitating its business expansion in the country. Similarly, in January 2023, ATCO Ltd. acquired Triple M Housing, thereby enhancing its global modular operations. Thus, the increasing frequency of acquisitions is anticipated to accelerate US modular construction market growth during the forecast period.

Major Market Challenge

The complicated approval process is a major challenge for market growth. The approval process for it building is a lengthy process. All projects, regardless of how they are constructed, must comply with applicable local, state, and federal laws and regulations. The production is more advantageous in some state and local jurisdictions than others. In an ideal world, only connections and field work would be subject to local government inspections, and modules would be subject to state regulations (such as the Pennsylvania Industrialized Housing Act).

However, the approval and implementation phases might be made more difficult in areas where there is a significant union influence. Such complicated approval processes will impede US modular construction market growth during the forecast period.

Customer Landscape

Our analysis of the adoption life cycle of the market indicates its movement between the innovator's stage and the laggard's stage. The US modular construction market forecasting report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2024 to 2028. 

Market Customer Landscape

Who are the Major US Modular Construction Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Lendlease Corp. Ltd. The company offers Engineering, Procurement, and Construction Management services. Also, the company offers urbanization, residential and retirement communities, and infrastructure development.

McGRATH RENTCORP. The company offers Campus Maker Hybrid, Campus Maker ModPod, Eco II Xpand Two Story Modular Classroom, Complexes, Mobile Offices, and Restrooms. Also, the company offers rents and sells electronic test equipment nationally and internationally from two facilities located on the grounds of the Dallas Fort Worth International Airport in Grapevine, Texas, and Dollard des Ormeaux, Canada.

We also have detailed analyses of the market's competitive landscape and offer information on 15 market players, including:

• Abtech Inc.
• ATCO Ltd.
• Bechtel Corp.
• Black Diamond Group Ltd.
• Building Pro
• Commercial Structures Corp.
• Fluor Corp.
• GUERDON LLC
• JL Construction
• Kwikspace Pty Ltd.
• Modular Genius
• Nadler Modular
• Pac Van Inc.
• Satellite Shelters Inc.
• Skanska AB

Technavio's US modular construction market research report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.

Market Analyst Overview

Hurricanes, floods, wildfires, and earthquakes have underscored the need for resilient and adaptable construction solutions, leading to an increase in demand. Offering both permanent construction and relocatable or portable buildings, the market for relocatable modular construction (RMC) is rapidly expanding. Off-site building activities include the fabrication of timber modular homes, multi-story wood homes, and modular concrete structures. These structures offer seismic resistance, fast installation, and ease of fabrication, making them ideal for challenging designs and customizable homes. The U.S. construction industry is transforming, leveraging innovations in structural steel and building materials like H-type beams, I-beams, and T-shaped structures. Embracing mechanical and chemical properties enhancements, it's shifting towards timber modular building and biodegradability of materials for sustainability. Addressing challenges like natural disasters, it prioritizes reconstruction and employs relocatable modular construction for temporary housing. With a focus on economic expansion and environmental protection, the industry ensures that controlled manufacturing facilities and modular construction processes meet international and local building codes, fostering innovation while guaranteeing safety and sustainability.

Off-site building construction, also known as modular fabrication or prefabricated construction, is increasingly being adopted in various industries, including healthcare. This construction method involves manufacturing building components off-site and transporting them to the construction site for assembly. Timber modular homes are particularly popular in this sector due to their ability to create quiet, safe, and hygienic medical facilities. Hospitals and healthcare organizations stand to benefit from reduced labor costs, material wastage, and construction time. Patients, in turn, enjoy high-quality facilities designed specifically for their needs. Advancements in digital technologies, such as computer-aided design (CAD) and building information modeling (BIM), are driving the growth of the off-site building industry. These technologies improve design capabilities, quality control, and manufacturing processes. House wraps, a crucial component in the building envelope, are essential in ensuring energy efficiency and protecting the structure from moisture damage. Mechanical properties such as ductility, recyclability, and reusability make off-site buildings an attractive option for various projects, including prefabricated buildings and residential structures. However, the lack of skilled labor remains a challenge in the industry.

The industry addresses challenges like transportation and assembly issues through modular construction work, offering scalable solutions for various construction segments. Affordable housing and luxury developments benefit from modular techniques, meeting diverse urban needs with reduced construction timelines and improved resource utilization. Specialized knowledge and skills in logistics, supported by training programs, enhance the efficiency of modular construction operations. In response to demand, state-level administrative agencies, including Massachusetts with its manufactured buildings program, are facilitating regulatory compliance and industry growth. Players are expanding their footprint, catering to sectors like healthcare, hospitality, and education. This growth underscores modular construction's pivotal role in addressing US urban development challenges and enhancing construction project outcomes.

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What are the Key Data Covered in the US Modular Construction Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2028.
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market's competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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