Watching a timelapse video of a structure being built is interesting, oddly satisfying, and even thrilling. It is also instructive in illustrating how building concepts come together – shown in minutes, compared to the actual hours, days, or months they take to construct in real time.
Perfect examples are found in the expanding world of modular construction, where speed and cost efficiency are beginning to transform the global construction and real estate markets. Here are a few videos from the healthcare and hospitality markets, where the use of modular construction is growing fast (literally!):
What is modular construction and why is it experiencing a revival?
Modular construction isn’t a new concept (it has been around for almost two centuries), but nearly everything involved in it today is undergoing a renaissance with modern technology advancements and demand for alternative or new construction methods. The surge is happening globally due to demand for sustainability, as well as more timesaving and cost-efficient approaches to building construction. Many factors are driving overall demand, including the need for affordable housing, healthcare, and educational facilities for our growing world population, as well as building needs in areas lacking skilled labor and materials, and the ability to quickly introduce or expand commercial enterprises.
Modularization is the design principle that divides construction projects into smaller parts called modules, which are independently created within a controlled environment and later interconnected with other modules. In modular construction, this means building components are manufactured off-site, often at multiple factories, and ultimately delivered to a job site for full assembly. The terms off-site construction, prefabrication, and modular construction are used interchangeably.
There are distinct advantages compared to traditional construction
While there is essentially no difference in the materials or specifications used in modular construction compared to traditional on-site construction, here are just a few of the major benefits shared by all stakeholders in the process:
- Building information modeling (BIM), an innovative architecture, engineering, and construction technology, is used to conduct testing and building design to make immediate improvements and avoid unnecessary costs – prior to construction or assembly at a job site. This intelligent, holistic technology “produces a digital representation of an asset across its lifecycle, from planning and design to construction and operations.”
- Modular construction provides lower construction costs and greater economies of scale through standardization, along with the ability to create different configurations to deliver greater value for a buyer. In other words, most modular components are easily customized according to a customer’s detailed specifications.
- Off-site modular construction happens in tandem with on-site work, which dramatically reduces project construction time (by 20 to 50%).
- Modular projects can move forward regardless of on-site weather conditions (60-90% of module construction takes place in a factory).
- Modules can be taken apart, relocated, or repurposed for different projects, and existing buildings or structures can be easily expanded.
Industry revenue and growth projections
Modular construction is gaining steam worldwide. But how big is the modular construction industry and how fast is it growing compared to the global construction industry in general?
Global Construction Market: In November 2022, Statista research published the revenue size of the global construction industry now in the coming years. The size of the market amounted to $6.4 trillion U.S. dollars in 2020 and is expected to reach $14.4 trillion in 2030 – more than twice its size in 2020.
Global Modular Construction Market: In July 2018, Straits Research reported the global modular construction market size was valued at $137.8 billion U.S. dollars in 2021 and is expected to grow to $271 billion by 2030. It is expected to grow at a CAGR of 8% during the forecast period (2022–2030).
McKinsey & Company says many factors determine whether a market is likely to embrace modular construction, but the two biggest determinants are real-estate demand and the availability and relative costs of skilled construction labor. “Perhaps most important, we see a change in mindset among construction-sector CEOs, as many leaders see technology-based disruptors entering the scene – and realizing it may be time to reposition themselves,” they said.
More compelling facts and figures
As modularization grows, stakeholders in the broader construction industry, including manufacturers, developers, suppliers, the public sector, engineering and construction firms, and investors, will have to make changes. There are also considerations as to whether this approach is suited to a particular market or location, such as regulatory, supply chain, and logistics conditions, and again, access to materials, demand, labor availability, and other factors.
Where conditions are right, however, and with time, new business models, and the right talent, the approach and cost savings are most promising. TechnoStruct, one the leading BIM consultants in Southern California, provides key takeaways from McKinsey’s industry report:
Modular construction can reduce project timelines by 50% and cost by as much as 20%: When compared to traditional methods of construction, modular construction can reduce construction timelines by as much as 50% by using pre-engineered designs and fabricated modular units that form the foundation of the infrastructure. Apart from improving efficiency and lowering labor costs, modular construction provides even more opportunities to improve cost efficiencies with its ability to shorten schedules and complete projects faster.
Modular construction has gained popularity in western countries: The adoption of modular construction has been drastic across the world, especially in Europe and the USA. The latest statistics suggest that 45% of the current housing in Norway, Sweden, and Finland was built modularly.
Modular construction has great potential in the United States: The United States is one of the most promising countries for the expansion of modular construction.
Modular construction has its challenges, but an experienced team can eliminate these issues: Modular construction has a few difficulties. It requires a critical move in attitude and techniques, as well as the need to build up manufacturing and assembling environments. Also, the misperception of low quality must be overcome, as stated in the McKinsey report: “The industry will need to overcome lingering perceptions of the post-war era that prefab housing is only a poor-quality, cookie-cutter solution for the masses.”
Modular construction is poised for widespread growth: After WWII, modular construction was not able to gain a significant foothold in the United States due to misconceptions, but the critical distinction today is the rise of digital technology in the construction domain that has enabled project managers, engineers, and designers to create stronger, more operational, more functional, and more aesthetically pleasing modular designs than ever before.
The benefits of modular construction extend beyond the construction industry: Modularization supports other elements of society with wide-ranging effects:
- Growth and wage increases for companies that save money through this method
- Safer working conditions for construction teams
- More affordable and higher-quality housing
And on top of it all, it’s beautiful! Modular construction is very commonly used in the healthcare, education, hospitality, housing, and several other industries, and the designs can be breathtaking. Check out the Modular Building Institute’s (MBI) 2022 award winners in modular design.
A leading talent and job source for complex opportunities
Demand is high for professionals who understand modular design concepts and applications, from technology to design, engineering, surveying, manufacturing, quality control, transportation, logistics, assembly, and public sector roles, including building codes professionals. Professionals are transferring their skills from the general construction, manufacturing, and IT industries to the modular sector, and others are specializing in solutions required to meet the modular design and construction moment.
Whether you are a hiring company or professional looking for an opportunity in this growing market, Goodwin Recruiting can help. We are a leader in executive and professional recruiting, focused on talent recruitment for many industries where modular construction is booming, including manufacturing, medical and healthcare, hotel and restaurant, industrial, information technology, government, senior living, and more. Some of the roles we fill in general and modular construction include:
- Field Superintendents
- Architectural Job Captains
- Construction Managers
- Project Managers and Coordinators
- Directors of Sales
Reach out to us today!