Modular construction in the US: a booming technology
At the Good Samaritan pediatric trauma center on Long Island, patients spend time recovering from treatment in a bright and airy, child-friendly atmosphere. The building, which won an international modular construction award in 2021, combines a steel post and beam assembly with light gauge infill and surpasses standards for medical facilities.
All components were built at a modular construction facility then transported to the site. This approach cut the building schedule by 40%, saving significant sums of money on labor costs, mobilization, and demobilization. It also minimized disruption and disturbance on the site thanks to the center’s fast build time.
Modular construction is going through a period of sustained growth. The market achieved almost $40 billion in revenue in 2019, which was a 10% increase from that generated in 2016. Industry experts expect continued growth at a CAGR of 4% until 2026.
What is modular construction and how big is the market’s potential? And what are the pros and cons of this approach?
What is modular construction?
Modular construction is a technique where workers manufacture building components in a factory. The components are then transported to a site and connected into place. The manufacturing process can cover a wide variety of structural elements, including walls, window frames, pipes, entire rooms, and much more. Most materials, including timber, concrete, steel, and aluminum can be prefabricated. Once these materials are at the site, construction workers simply connect them according to a plan. All manufacturers must comply with building codes as for traditional buildings.
Modular construction is not new. It has existed for over 100 years and was relatively popular in the United States after World War Two. However, modular buildings became less popular as clients considered them less attractive and poorly designed compared to traditional buildings.
However, over the past decade, there has been sustained growth in interest in this approach. Thanks to advances in technology and improved techniques, modular manufacturers can now produce more attractive multi-family units, hospitals, schools, hotels, and desirable individual homes.
How big is the modular construction market?
With a CAGR of 4%, the modular construction industry looks set to expand reasonably quickly. There are some 200 modular construction companies in the US, and the technique has been used in several high-profile buildings, including the 168-room AC Marriott in Manhattan.
However, the current growth comes from a low starting point. Right now less than 4% of housing in the US is fabricated off-site – compared to around 45% in Scandinavia or 15% in Japan.
Benefits of off-site construction
So, what are the benefits of modular construction? Why are a growing number of architects, designers, and contractors choosing to use modular components?
- Accelerates project timelines and boosts productivity
According to research by McKinsey, the consultancy, modular projects can see an acceleration of project timelines of 20% to 50%. These time savings are achieved because the manufacturing process is significantly faster than designing and engineering on site. All components arrive on site ready to go, so contractors simply need to put them into place. These time savings could therefore lead to a significant productivity boost for the industry.
- Avoids weather issues
Poor weather can cause delays in construction, either due to safety concerns or because wet weather can interfere with certain materials. However, most work on modular buildings takes place indoors or in a factory, so this becomes much less of an issue.
- Reduces waste
Construction projects are one of the biggest sources of waste due to the lack of predictability around how much material will ultimately be needed on traditional construction sites. On the other hand, modular manufacturing is much less wasteful because the designers can specify precisely how much material will be used for each component. This of course saves money and has environmental benefits too.
- Minimizes pollution and disruption
The construction of buildings can cause significant disruption to the surrounding area in terms of air pollution, traffic, and noise, and this can last for many months. On the other hand, modular construction emits limited amounts of pollution on the construction site itself, and putting buildings up usually takes much less time – and therefore reduces local disruption.
Other benefits of modular construction include greater flexibility with parts, easier refurbishing, and increased safety on construction sites.
Barriers to modular construction
Despite the benefits of modular construction, there are a variety of obstacles to overcome before the technique goes mainstream. These include:
- Reskilling and changing processes across the industry
For modular construction to go mainstream, the industry will need to make significant changes to how it works. From the choice of building materials to understanding manufacturing logistics and assembly, through to the way projects are managed, there will be a steep learning curve before modular construction becomes easily repeatable and scalable.
- Perception problem
One challenge for modular construction to overcome is a general perception that these buildings are of lower quality and are less attractive than more traditional structures. Convincing buyers that modular construction is of comparable quality to traditional structures will require extensive education.
- Sourcing and scaling
Expanding modular construction will also require a new approach to sourcing materials used in buildings, with suppliers having to change how they provide materials to factories. A lumber business, for instance, will need to be able to guarantee continual supplies of timber to a factory – this is a different approach to providing smaller batches to individual contractors. This means the supply chain will need to change how it operates.
Technology is at the heart of modular construction
One of the most interesting benefits of modular construction is that it allows designers, manufacturers, and contractors to maximize the use of technology to boost efficiency. For example:
- BIM software can support the design process and allow factory workers to produce incredibly complex and precise components.
- Project management applications can be used to control the project better and give more accurate timings.
- Mobile applications like PlanRadar can support quality assurance and help with defect identification and correction in factories. On-site, construction workers can use PlanRadar’s digital plans to verify layouts, then use the mobile app to check for problems before progressing to the next stage.
Could modular techniques benefit you?
In the coming years, industry experts expect a boom in modular construction in the construction industry. And first movers into this space can expect to reap the rewards. So, what is modular construction’s potential for your organization?
PlanRadar provides innovative mobile-first software solutions to the construction and real estate industries. Our app is available on all iOS, Android, and Windows devices. So far it has helped more than 10,000 customers in countries around the world digitize their workflow.