The modular construction market is expected to reach USD 142.87 billion by 2030, up from USD 109.60 billion in 2025, at a CAGR of 5.4% over the forecast period. This research analyzes major modular construction market drivers, restraints, challenges, and emerging opportunities, while highlighting innovation trends and financial insights influencing competitive strategies. The modular construction market is expanding rapidly in response to the rising global demand for efficient, cost-effective, and environmentally friendly building solutions in various sectors such as residential, commercial, healthcare, education, infrastructure, and emergency housing. Other significant growth drivers are rapid urbanization, shortage of skilled labor in conventional construction, the desperate need for affordable housing, and growing concern for the environment. Modular construction allows projects to be completed 30-50% faster than conventional means since fabrication of modules can occur in tandem with site preparation, both in controlled factory conditions. The process drastically reduces site waste by up to 90%, improves quality control and worker safety, and allows much better cost predictability with fewer weather delays and material waste. This will also help in sustainability through reduced embodied carbon, energy-efficient design, and better reusability or recyclability of materials. The market view is evolving, with modular building being seen as a high-quality, durable choice rather than a transient solution.
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Permanent modular construction is expected to be the second-fastest-growing type during the forecast period.
During the forecast period, permanent modular construction is expected to grow at the second-fastest rate. This market is primarily driven by the increasing adoption in various types of projects, residential, non-residential, and institutional, for which durability, customizability, and disturbance-free construction are essential. Developers have increasingly been adopting this type of modular construction in order to have faster project execution and more predictable costs than in conventional construction practices. These are some factors responsible for this trend, which is further encouraged by urbanization and investments in infrastructure projects in developed and developing countries.
Wood is expected to be the second-fastest-growing material during the forecast period.
Wood is predicted to be the second most rapidly growing material during the forecast period in the modular construction market. The reason for the sudden growth in the use of this material in modular construction is the increasing adoption of environmentally sustainable, renewable, and attractive modular construction solutions. The use of wood in modular construction is beneficial in the reduction of environmental effects. The use of engineered timber, cross-laminated timber (CLT), and other high-performance wood products is a factor that contributes to the increase in demand, and the growth is facilitated by government grants and schemes for green construction, the implementation of more stringent environmental regulations, and a rising trend among consumers in preferring low-carbon, sustainable building materials.
Office is expected to be the second-fastest-growing end-use industry during the forecast period.
Office spaces are expected to be the second-fastest-growing end-use industry during the forecast period. This growth is driven by the need for office spaces that are faster, cheaper, and more flexible. The demand for office spaces that cater to these needs, particularly in urban areas, is thus supplemented by the need for sustainable, energy-efficient buildings. Additionally, the increase in coworking spaces, as well as the demand for flexible office solutions, further contributes to the growth of office spaces. Consequently, the need for modular offices that are useful, attractive, and eco-friendly is being motivated due to the increased need for hybrid work.
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Middle East & Africa is expected to be the second-fastest-growing region during the forecast period.
The Middle East and Africa will be the second-fastest-growing region during the forecast period. This can be attributed to the fast-paced nature of urbanization, the requirement for housing and commercial spaces, and major boosts in infrastructure and industrial developments. To reduce time and expenditure, governments are supporting the adoption of modern construction techniques, which have brought modular construction to the forefront. Besides this, there are increased expenditures on energy-efficient and sustainable construction solutions, and modular construction becomes an attractive alternative in this process.
Modular Construction Comapnies
The report profiles key companies, including Skanska (Sweden), Laing O'Rourke (UK), ATCO Ltd. (Canada), Modulaire Group (UK), Red Sea International (Saudi Arabia), VINCI (France), The Bouygues group (France), Bechtel Corporation (US), Fluor Corporation (US), Lendlease Corporation (Australia), and KLEUSBERG Group (Germany).
Skanska (Sweden) is one of the largest construction companies in the world and has been working in selective markets in the Nordic countries, Europe, and the US as well. Its specialty ranges from undertaking complex projects to handling projects of a massive scale. This organization has four business divisions: Construction, Residential Development, Commercial Property Development, and Investment Properties. Construction includes public and commercial buildings, residential structures, transportation, energy, defense, data centers, and advanced manufacturing facilities. Residential Development focuses on attractive and energy-efficient multi-unit and single-unit houses for enabling sustainable urban life. The Commercial Property Development business provides high-quality flexible offices, life science properties, logistics, and warehouses in prime locations. The Investment Properties segment is responsible for a portfolio of environmentally certified office buildings in Sweden. Globally, the company has an established presence mainly in the Nordics (Sweden, Norway, Denmark, Finland), Europe (Poland, Czech Republic, Slovakia, Hungary, Romania, UK), as well as the US. They combine local expertise with global capabilities to deliver projects effectively.
Laing O’Rourke (UK) is an international engineering and manufacturing-led construction company specializing in the delivery of complex, large-scale infrastructure and building projects across global markets. Its construction activities span building and civil engineering, major infrastructure, and program management, while the manufacturing segment produces high-quality prefabricated components that improve control over quality, cost, and schedules. Plant hire and services enhance delivery via specialized equipment, digital engineering, and asset management competencies. A primary distinguishing factor is Laing O’Rourke’s operating model, which is driven by off-site production, with as much as 70% of project value realized off-site, supported by proprietary technology and digital platforms. This methodology has augmented productivity by around 60% and diminished project timeframes by about 30%, concurrently increasing safety, sustainability, and quality outcomes. The company maintains a robust presence in Europe, Australia, and the Middle East, with significant operations in the UK, Australia, and Dubai, and boasts over 150 years of construction and engineering legacy.
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ATCO Ltd. (Canada) is a multifunctional global infrastructure, logistics, and energy enterprise with a longstanding history of operations in over 100 countries, providing important services that support communities, industries, and governments globally. The company operates through the following segments: Canadian Utilities Limited, Structures & Logistics, Neltume Ports, and Corporate & Other. Its Canadian Utilities Limited segment anchors the company's utility operations and includes ATCO Energy Systems, which provides regulated electricity and natural gas transmission and distribution services across Canada and selected international markets; ATCO EnPower, which focuses on electricity generation, renewable energy, energy storage, industrial water solutions, and related infrastructure development; and ATCO Australia, which delivers regulated natural gas distribution and electricity generation services in Western Australia. The Structures & Logistics segment delivers modular facilities, workforce and residential housing, construction, defense support, and disaster and emergency management services globally. Neltume Ports extends ATCO's footprint into transportation logistics through port ownership and operations across the Americas, while Corporate & Other supports the group through centralized functions and includes land development, environmental materials processing, food services, and retail energy and home maintenance solutions.
Modulaire Group (UK) is a leading provider of modular space solutions and services across Europe and the Asia-Pacific region, delivering smart, adaptable environments for work, learning, living, and secure storage. It offers prefabricated modular space and serves a wide variety of business needs, comprising offices, healthcare facilities, schools, and storage. It provides modular space for lease and for sale. They work across several sectors, including construction, public administration, energy and natural resources, as well as industry and services. Modulaire, through its subsidiaries such as Algeco in Europe and Ausco Modular in Australia, offers prefabricated modular space solutions for rent or purchase options. In addition, it provides management solutions for worker accommodations and portable storage solutions for secure storage. They offer services to over 52,000 clients across diverse sectors, serving 23 countries with more than 330,000 modular units.
Red Sea International (Saudi Arabia) is one of the world’s most recognized names with respect to fully integrated solutions pertaining to housing and construction, ranging from design and planning stages to production and functionality of both permanent and temporary solutions for buildings. It has decades of experience and success with respect to executing difficult projects on a large scale. The company has been organized into three business segments: General Construction, Building Sales Revenue, and Lease Revenue. They have developed three world-class manufacturing units in Saudi Arabia, the UAE, and Ghana to efficiently perform off-site manufacturing, quality control, and timely delivery of projects. They have a broad network of subsidiaries in different regions like the Middle East, Africa, and Asia, in relation to their operations in housing services, prefabricated construction projects, building materials, electrical contracts, paints, investments, and affordable housing schemes.
