Modular construction involves manufacturing building modules off-site and assembling them on-site, enabling faster, cost-effective, and sustainable construction. The market is growing due to urbanization, labor shortages, and rising demand for efficient residential and commercial buildings. 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. The report provides key insights into current modular construction market trends, growth drivers, challenges, and opportunities shaping the market landscape. The global modular construction market is growing rapidly, amid increasing urbanization, a shift toward more sustainable building practices, and increased demand for faster, cheaper construction. According to the US Green Building Council, buildings in the United States account for approximately 39% of CO2 emissions, 40% of energy use, and 13% of water consumption, highlighting exactly why greener methods matter.

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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.

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 Companies

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)

Skanska is one of the world’s leading construction and project development companies, operating across the Nordics, Europe, and the US. The company delivers large-scale and complex projects across construction, residential development, commercial property development, and investment properties, with a strong focus on sustainable and energy-efficient buildings.

Laing O’Rourke (UK)

Laing O’Rourke is a global engineering-led construction company specializing in complex infrastructure and building projects. Its off-site manufacturing–driven delivery model enables improved productivity, reduced timelines, and enhanced safety, quality, and sustainability across projects in Europe, Australia, and the Middle East.

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ATCO Ltd. (Canada)

ATCO is a diversified global infrastructure, energy, and logistics company operating in over 100 countries. Through its utilities, structures, logistics, and port operations, ATCO delivers modular buildings, workforce housing, energy systems, and essential infrastructure services worldwide.

Modulaire Group (UK)

Modulaire Group is a leading provider of modular space solutions across Europe and Asia-Pacific. Through subsidiaries such as Algeco and Ausco Modular, the company offers prefabricated buildings and storage solutions for construction, education, healthcare, and industrial applications.

Red Sea International (Saudi Arabia)

Red Sea International is a global provider of integrated housing and prefabricated construction solutions. The company delivers permanent and temporary modular buildings through advanced off-site manufacturing facilities serving markets across the Middle East, Africa, and Asia.

Recent Developments

• December 2025 : Laing O'Rourke was confirmed as one of four partners in the Midlands Rail Hub Alliance, alongside VolkerRail, AtkinsRealis, and Siemens Mobility, to design and deliver major rail upgrades that improve capacity and connectivity across Birmingham and the West Midlands.

• July 2025 : Skanska signed a 10-year lease with AFRY for about 15,000 sq. m. of office space at the Solna Link building in Arenastaden, Sweden, which will become AFRY’s new headquarters.

• September 2024 : ATCO Ltd. acquired NRB Modular Solutions, enhancing its modular construction and retaining skills in Canada, and gaining better market and facility access in Canada and the US.

• May 2024 : Laing O'Rourke was selected as a construction partner in National Grid's Great Grid Partnership, a USD 12.1 billion framework agreement for the supply chain in connection with new and existing power infrastructure projects.