Modular Construction Market Size & Growth Report to 2030

The global modular construction market size was valued at over USD 100 billion in 2024 and estimated to grow at a significant CAGR of over 6% during the forecast period from 2025 to 2030. The market is gaining significant traction as a modern alternative to traditional building methods. This approach involves fabricating sections of a structure in a controlled factory environment and then assembling them on-site, leading to faster construction timelines, improved quality control, and reduced on-site disruptions. Its adoption is accelerating across residential, commercial, and industrial projects due to rising urbanization, labor shortages in the construction sector, and the growing need for cost-effective and sustainable building solutions.

Permanent modular construction is the dominant method, widely used for long-term residential and institutional structures. Steel remains the material of choice, offering strength, flexibility, and ease of transportation. The residential sector leads the market, driven by increasing demand for affordable housing, while the commercial and healthcare sectors are also embracing modular techniques for rapid facility deployment. Regionally, Europe leads in adoption due to supportive regulations and innovation, whereas the Asia-Pacific region is witnessing rapid growth fueled by urban development and infrastructure investments.

Market Snapshot:

Key Drivers of Modular Construction Market

The global modular construction market is being driven by several critical industry challenges and global trends, particularly the shortage of skilled labor and the rising cost of conventional construction. Traditional construction projects are often delayed or over budget due to labor constraints, weather dependencies, and logistical complexities. Modular construction addresses these issues by shifting a significant portion of the work to factory-controlled environments, where standardized processes improve efficiency, reduce material waste, and minimize labor requirements on-site. According to recent industry insights, over 80% of contractors in the U.S. and parts of Europe are facing labor shortages, which is accelerating the shift toward modular building methods. These systems can reduce project timelines by 30% to 50%, while also delivering cost savings of up to 20%. Furthermore, modular designs allow for precision engineering, reducing material waste by nearly 50%, which contributes to greater resource efficiency and environmental benefits.

Another major factor propelling the modular construction market is the increasing demand for sustainable, affordable, and resilient buildings, especially in the face of natural disasters, housing shortages, and shifting demographic needs. Modular buildings are often designed to be more energy-efficient and produce a lower carbon footprint compared to traditional structures. Their repeatable, scalable nature makes them ideal for emergency housing and disaster recovery, such as the rapid response after the 2023 Maui wildfires, where modular units were used to house displaced residents. In addition, new housing concepts—like “granny pods” (compact modular units for elderly care within backyards)—are gaining popularity in markets such as Australia, where local governments in Queensland and Victoria have endorsed modular housing to address the ongoing housing crisis. These structures not only provide flexible living arrangements but also meet the growing demand for multigenerational housing. Overall, the drive toward modular construction is reinforced by its ability to offer quick deployment, lower costs, and enhanced sustainability—all crucial in today’s dynamic construction landscape.

Emerging Trends Shaping the Modular Construction Market

Technology Integration and Digital Transformation

One of the most significant trends in modular construction is the increasing integration of advanced technologies like Building Information Modeling (BIM), digital twins, automation, and robotics. These tools are revolutionizing how modular buildings are designed, fabricated, and maintained. For example, BIM allows for highly detailed and collaborative design processes, reducing errors and streamlining communication between architects, engineers, and contractors. Digital twins create real-time digital replicas of physical structures, allowing developers to monitor performance and predict maintenance needs throughout the building’s lifecycle. Meanwhile, factory automation and IoT-based systems are enhancing productivity and precision during off-site module manufacturing, reducing human error and increasing speed. The use of virtual and augmented reality (VR/AR) is also becoming more prevalent, enabling stakeholders to visualize projects before construction begins and make adjustments on the fly.

Focus on Sustainability and Green Construction

Environmental concerns are pushing the modular construction industry toward more sustainable building practices. Modular construction inherently reduces waste, as controlled factory conditions allow for better material optimization and reuse. This aligns well with global efforts to reduce carbon emissions and construction-related environmental impacts. Additionally, builders are increasingly adopting eco-friendly materials such as cross-laminated timber (CLT), recycled steel, bamboo composites, and bio-based insulation. Some modular firms are experimenting with hempcrete, a sustainable alternative to concrete, and embracing circular design principles that extend the life cycle of materials and modules. Moreover, the modular approach is more energy-efficient, thanks to tighter tolerances, better insulation, and opportunities for integrating renewable technologies like solar panels and smart energy systems.

Diversification of Applications Across Sectors

Modular construction is no longer confined to single-family housing—it is expanding rapidly into commercial, institutional, and industrial sectors. This includes modular hotels, office spaces, retail outlets, schools, hospitals, and student housing. The hospitality industry, for instance, is embracing modularity to quickly scale hotel chains while maintaining brand consistency. In the healthcare sector, modular construction allows for the rapid deployment of clinics, testing labs, and isolation wards—especially vital in times of crisis like the COVID-19 pandemic or natural disasters. The speed and standardization offered by modular construction are ideal for projects with strict timelines and quality demands. High-rise buildings and mixed-use developments are also entering the modular space, showcasing the method’s versatility and scalability.

Response to Urbanization and Housing Pressure

As urban populations grow and land availability shrinks, there is a pressing need for high-density, affordable housing solutions, particularly in fast-developing economies like India, China, and across Africa. Modular construction is seen as a key strategy to address this demand due to its ability to deliver quality housing quickly and at scale. Governments and city planners are increasingly incorporating modular techniques into urban development and infrastructure projects. In response, regulatory frameworks are evolving to support the shift. For example, countries like Australia are reviewing and updating building codes to include modular-specific guidelines, improving compliance and safety while boosting public and investor confidence. This shift in policy reflects a broader global trend: recognizing modular construction not as an alternative, but as a core component of future urban development strategies.

Future Opportunities Shaping the Modular Construction Market’s Evolution

Modular solutions are increasingly being embraced in regions hit by natural disasters. For instance, companies like ICON, Reframe Systems, and Hapi Homes have entered disaster-stricken zones in California and Hawaii to build prefabricated homes that are both faster and more affordable compared to conventional reconstruction. Hapi Homes notably offered a modular rebuild for $200 k less, cutting construction time also in half—a compelling value proposition for homeowners like Jerry Camarillo after California’s wildfires. This accelerated adoption under crisis conditions is transforming modular housing from niche applications into mainstream emergency-response infrastructure, and could redefine policy and construction funding in vulnerable regions.

Rapid urbanization and persistent housing shortages across APAC and North America present significant growth potential. In fact, factory-built modular homes in Colorado — such as those from Fading West — can be completed in 5–7 days and are ready for occupancy within six weeks. This model is being leveraged by nonprofits like Habitat for Humanity to address local affordable housing shortages. In parallel, Australia is showcasing scalable modular high-rises: a seven‑storey apartment block in Brisbane was erected in just 11 days using off-site components, sharply cutting project timelines and costs. These examples signal a broader opportunity for modular providers to partner with governments, developers, and NGOs to deliver multi-family housing, student residences, and social infrastructure at scale.

Market Insights:

By Type: The Permanent Modular Construction Segment Dominated the Modular Construction Market

The global modular construction market is bifurcated into type, material, module, application, and geography. On the basis of type, the permanent modular construction (PMC) segment dominates the modular construction market and holds the largest share among the two primary types. PMC structures are built to meet the same codes and standards as traditional site-built buildings, making them suitable for long-term and large-scale applications such as residential housing, commercial offices, schools, and healthcare facilities. The appeal of PMC lies in its ability to combine the speed and efficiency of factory-based manufacturing with the permanence and durability required for long-term occupancy. Developers and governments increasingly favor PMC for high-density housing and public infrastructure projects, especially in urban areas where construction timelines are tight, land is limited, and quality standards are high.

What sets PMC apart and drives its dominance is its scalability and integration into mainstream construction workflows. Unlike relocatable modular construction, which is often used temporarily, PMC offers a permanent solution that rivals or exceeds traditional construction in quality and longevity. Recent developments, such as modular apartment towers and permanent healthcare buildings, demonstrate how PMC is becoming a preferred method for delivering complex, multi-story buildings with minimal disruption and faster completion times. As the construction industry shifts toward sustainable and time-efficient solutions, PMC continues to gain traction as the go-to approach for long-term development, solidifying its leadership in the modular construction market.

By Material: The Steel Sub-category Holds the Largest Share of Modular Construction Market

On the basis of material, the global modular construction market is further segmented into wood, steel, concrete, and others. As of 2024, the steel is the dominant material segment in the global market, largely due to its superior structural properties and versatility. It is widely used in both permanent and relocatable modular construction, particularly for commercial, industrial, and multi-story residential buildings. Steel’s high strength-to-weight ratio allows for longer spans and open interior layouts without the need for numerous supporting columns, making it ideal for complex architectural designs. Its resistance to pests, fire, and extreme weather conditions also makes it a durable and safe option for a wide range of environments. Additionally, steel modules are prefabricated with high precision in factory settings, which enhances construction speed and reduces waste.

The growing emphasis on sustainability and efficiency further reinforces steel’s dominance. As a fully recyclable material, steel aligns well with green building practices and circular economy principles. Many developers and contractors prefer steel for its consistency, ease of transport, and minimal maintenance requirements over time. Moreover, steel is particularly well-suited for integration with digital design tools like Building Information Modeling (BIM), allowing for accurate prefabrication and on-site assembly. These attributes collectively position steel as the preferred material for modular construction, especially in urban and infrastructure-intensive markets where quality, speed, and resilience are essential.

The modular construction market research report presents the analysis of each segment from 2020 to 2030 considering 2024 as the base year for the research. The compounded annual growth rate (CAGR) for each respective segment is calculated for the forecast period from 2025 to 2030.

Historical & Forecast Period

• 2020-23 – Historical Year
• 2024 – Base Year
• 2025-2030 – Forecast Period

Modular Construction Market Segmentation:

By Type:

• Relocatable
• Permanent

By Material:

• Wood
• Steel
• Concrete
• Others

By Module:

• Four-sided
• Open-sided
• Partially open-sided
• Mixed modules & floor cassettes
• Modules supported by a primary structure
• Others

By Application:

• Residential
• Commercial
• Industrial
• Healthcare
• Educational

By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Regional Analysis: Europe Leads the Modular Construction Market

Geographically, the Europe continues to be the dominant region in the global modular construction market, thanks to its progressive regulatory framework, strong demand for sustainable building solutions, and a mature ecosystem of construction technology firms. Countries like the United Kingdom, Germany, Sweden, and the Netherlands have embraced modular construction to tackle critical issues such as housing shortages, skilled labor gaps, and the push for low-carbon infrastructure. The UK’s government, for example, has been actively supporting modular methods through funding and housing programs that prioritize speed and efficiency without compromising quality. Modular construction is widely used across various sectors in Europe—including residential, healthcare, education, and commercial buildings—due to its ability to reduce construction timelines, lower emissions, and deliver high-performance buildings.

A recent development further strengthening Europe’s leadership is the implementation of the revised EU Construction Products Regulation (CPR), which came into effect on January 7, 2025. One of the key innovations in this regulation is the introduction of Digital Product Passports, which are mandatory for all construction components, including prefabricated modular elements. These passports ensure that products carry standardized digital documentation that includes critical data on environmental impact, material composition, durability, and recyclability. This move is expected to reduce construction waste across the EU by 10–15% and make modular building systems more traceable, reusable, and environmentally compliant. The regulation supports a shift toward circular construction practices, which aligns perfectly with modular construction’s inherent benefits—such as disassembly and reuse of modules.

In addition to regulatory support, Europe is seeing significant innovation in modular technologies. For instance, companies like Skanska, Algeco, and Laing O’Rourke are developing advanced modular solutions that integrate smart systems, sustainable materials, and digital design tools like BIM and digital twins. These innovations are not only improving build quality but also enabling modular construction to be used in more complex, high-rise, and mixed-use projects. With harmonized regulations, cutting-edge innovations, and strong environmental policies, Europe is not only dominating the modular construction market but also setting the global standard for how the industry evolves.

Competitive Landscape:

Some of the leading market players operating in the global modular construction market are Laing O’Rourke, Skanska AB, Modulaire Group (formerly Algeco Scotsman), Red Sea International Company, and Guerdon Modular Buildings. Companies are exploring markets by expansion, new investment, the introduction of new services, and collaboration as their preferred strategies. Players are exploring new geography through expansion and acquisition to gain a competitive advantage through joint synergy.

Key Companies:

• Laing O’Rourke
• Skanska AB
• Modulaire Group (formerly Algeco Scotsman)
• Red Sea International Company
• Guerdon Modular Buildings
• Sekisui House
• Lendlease Corporation
• Bouygues Construction
• Premier Modular Limited
• LEUSBERG GmbH & Co KG
• Fluor Corporation
• Clayton Homes

Key Questions Answered by Modular Construction Market Report

• Global modular construction market forecasts from 2025-2030
• Regional market forecasts from 2025-2030 covering Asia-Pacific, North America, Europe, Middle East & Africa, and Latin America
• Country-level forecasts from 2025-2030 covering 15 major countries from the regions as mentioned above
• Modular construction submarket forecasts from 2025-2030 covering the market by type, material, module, application, and geography
• Various industry models such as SWOT analysis, Value Chain Analysis about the market
• Analysis of the key factors driving and restraining the growth of the global, regional, and country-level modular construction markets from 2025-2030
• Competitive Landscape and market positioning of top 10 players operating in the market