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Modular Construction Market Size

ID: MRFR//1150-CR | 111 Pages | Author: Snehal Singh| July 2025

Modular Construction Market Size Snapshot

YearValue
2024USD 97.38 Billion
2035USD 150.0 Billion
CAGR (2025-2035)4.01 %

Note – Market size depicts the revenue generated over the financial year

The Modular Buildings Market is expected to reach a value of $97.38 billion by 2024, and is expected to reach $ 150.00 billion by 2035. This growth translates into a CAGR (compound annual growth rate) of 4.01% from 2025 to 2035, indicating a steady increase in the market. The demand for efficient and sustainable building solutions, which reduce the time and cost of construction, and minimize the impact on the environment, is the main reason for this market growth. The integration of building information modeling (BIM) and off-site construction processes is also expected to further boost the market. These innovations increase the efficiency and quality of the construction process, thereby increasing the attractiveness of modular construction to contractors and investors. The major players in the industry, such as Katerra, Skanska, and the Modular Building Institute, are actively pursuing strategic initiatives, such as entering into new alliances and investing in new technology, to benefit from this trend. Katerra’s focus on digital construction methods, for example, is a good example of the way the industry’s major players are adapting to the changing demands of the market.

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Regional Market Size

Regional Deep Dive

The Modular Construction Market is growing significantly in various regions, owing to the increasing demand for sustainable construction, cost efficiency, and quick construction time. In North America, the market is characterized by the increasing number of companies adopting the prefabrication technology to overcome the housing shortage and the challenges of urbanization. Europe is characterized by the implementation of regulatory policies that promote sustainable construction, while Asia-Pacific is characterized by the growing demand for prefabricated buildings in the construction of roads, airports, and other large-scale projects. Middle East and Africa is characterized by large-scale developments, while Latin America is characterized by a gradual shift towards prefabricated buildings to overcome the housing deficit.

North America

  • In the United States the government has resorted to a system of “Modular Construction” to encourage the use of the technique in public works.
  • It is no longer necessary to build on the spot, as was the case in the past. In this respect, companies such as Katerra and Factory OS are making great strides, for the future lies in the direction of factory-built construction, whose products are based on technologically-driven solutions that enhance productivity and reduce waste.
  • The growing density of population in cities like New York and San Francisco has increased the demand for prefabricated buildings, which are seen as a solution to the housing shortage.

Europe

  • The European Green Deal has led to an increase in the use of prefabricated components, which are intended to reduce the carbon footprint.
  • Sweden and Germany are at the forefront of the construction of the future. Skanska and ZĂĽblin are the pioneers in the field of prefabrication.
  • The new regulations in the United Kingdom, especially in the field of building safety and energy efficiency, have led to a growing demand for the use of prefabricated components to meet the new requirements.

Asia-Pacific

  • The Chinese are now bringing this technology to the construction of Asian highways, railways, bridges, and docks under the BRI, and this will speed up the construction and bring down the cost.
  • Sekisui House of Japan, for instance, has already been building such houses for many years, and has developed a system of prefabricated, movable, and, at the same time, intelligently arranged and furnished them.
  • The Australian construction industry is adopting this system in greater numbers, thanks to government initiatives to meet the housing shortage in the cities.

MEA

  • Under the aegis of the Vision 2021, the United Arab Emirates is investing heavily in the prefabricated building sector in order to improve the efficiency of the construction industry and meet the requirements of rapid urbanization.
  • In NEOM, a new city is to be built in which the buildings will be of a special type, built in a factory, and will be a model of economy and comfort.
  • In countries like Qatar, the regulatory framework is being developed to encourage the use of prefabricated structures in the belief that this method of construction will reduce construction time and increase efficiency.

Latin America

  • In Brazil, a resurgence in the use of prefabricated construction methods is gaining ground, especially in the affordable housing sector, a trend prompted by government programs to reduce housing deficits.
  • Brazil is now in the vanguard of the development of prefabricated houses, with companies like Tenda and MRV, which have focused on cheap solutions to meet the growing demand for housing.
  • In Mexico, for example, the authorities are beginning to favour this form of building, in their efforts to find new ways of tackling the housing problems in the cities.

Did You Know?

“With the construction of the prefabricated building the time of construction is reduced by up to 50%, compared to the time of construction with the usual building methods.” — Modular Building Institute

Segmental Market Size

The Modular Construction Industry is a growing industry, based on the growing demand for sustainable, energy-efficient building solutions. There are many factors that have a positive influence on this industry, such as the need for affordable housing, government regulations promoting sustainable building practices and technological advancements in prefabrication. These factors are reshaping the building landscape and making modular construction an attractive option for both property developers and builders.

At present, the market is in a stage of implementation, with Factory OS in the United States and Legal & General Modular Homes in the United Kingdom leading the way. In the main, the technology is used for housing, offices, and health care facilities, where speed and efficiency are paramount. Growth will be accelerated by a drive towards sustainability and a demand for lower carbon footprints from governments. Moreover, building information modelling (BIM) and the use of robots will increase accuracy and reduce waste.

Future Outlook

The Modular Construction Market is expected to grow significantly from 2024 to 2035. The projected market value is expected to increase from $97.38 billion to $148.2 billion, at a compound annual growth rate (CAGR) of 4.01%. The growth is driven by the growing demand for efficient and cost-effective building solutions that can address the issues of urbanization and the lack of housing. Modular construction will gain market share in the construction industry as a whole. The penetration rate is expected to increase from 10% to 15% in 2035, compared to 9% in 2024.

This growth is largely due to the development of technology, such as BIM (Building Information Management) and automation of manufacturing processes, which improves the accuracy and speed of prefabrication. Also, the governments’ support for sustainable building and the reduction of waste is likely to increase the growth of the market. Also, the integration of smart technology into the building system and the increasing popularity of off-site construction will have a significant impact on the future of the market. It is expected that the industry will continue to grow rapidly, and that it will become a cornerstone of modern building methods.

Covered Aspects:
Report Attribute/Metric Details
Growth Rate 6.57% (2024-2032)
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