New Report Aimed
at the Modular
From projects to
products,” the report
makes the case
for long-term and
of the industry.
From the report:
For decades, construction has lagged
behind other sectors in productivity
performance. Now there is an
opportunity for a step change: shifting
many aspects of building activity away
from traditional onsite projects to
offsite manufacturing-style production.
While modular (or prefabricated)
construction is not a new concept, it is
attracting a fresh wave of interest and
investment on the back of changes
in the technological and economic
This research quantifies the potential
benefits, explores the challenges,
and looks at whether, this time,
modular construction will have a
more widespread and sustainable
impact. Among our findings: As one
of the largest sectors globally, a
profound shift in construction can
have major impact.
Recent modular projects have
already established a solid track
record of accelerating project
timelines by 20–50 percent. The
approach also has the potential
to yield significant cost savings,
although that is still more the
exception than the norm today.
Our analysis suggests that
leading real estate players that
are prepared to make the shift
and optimize for scale will be able
to realize more than 20 percent
in construction cost savings,
particularly as everyone involved
moves up the learning curve.
Under moderate assumptions of penetration, the market value for modular in new real-estate construction alone could reach $130 billion in Europe and the United States by 2030.
Multiple factors determine whether a given market is likely to embrace modular construction. The two biggest determinants are real estate demand and the availability and relative costs of skilled construction labor. In places such as the US West Coast, the southern part of the United Kingdom, Australia’s East Coast, and Germany’s major cities, labor shortages and large-scale unmet demand for housing intersect, making this model particularly relevant.
In many countries, modular construction is still very much an outlier. But there are strong signs of what could be a genuine broad-scale disruption in the making. It is already drawing in new competitors—and it will most likely create new winners and losers across the entire real estate and construction ecosystem.
This article originally appeared in the Modular Advantage Magazine - Third Quarter 2019 released in August 2019.