Modular Construction Market Size

Global Modular Construction Market size was valued at USD 104.67 Billion in 2023 and is poised to grow from USD 112.62 Billion in 2024 to USD 202.36 Billion by 2032, growing at a CAGR of 7.6% in the forecast period (2025-2032).

The rising demand for sustainable as well as efficient building solutions has been one of the major driving forces behind the development of this industry. Technological advancement has enabled rapid project completion, reduced labor fees, and reduced waste of materials, making it appealing to developers as well as clients in search of cost-effective construction. Rapid urbanization and the need for more affordable dwellings have further encouraged stakeholders to adopt such innovative construction techniques.

On the positive side, the shift toward green practice has also helped industry growth. Prefabrication is less material- and waste-intensive than traditional forms of construction, which aligns with global initiatives to reduce environmental impact. Governmental incentives promoting green construction procedures and the implementation of supportive policies further facilitated the shift for organizations to invest in such systems, driving levels of adoption across industries such as residential, commercial, and industrial.

However, the industry is faced with challenges that may hamper its growth. The regional inconsistency of regulation is likely to make adoption more difficult and increase the cost of compliance. Furthermore, structural durability problems and limited customization levels compared to traditional building processes have deterred possible adopters. Despite these problems, ongoing research and development effort targets eliminating these problems, ensuring the long-term viability of this process of construction.

How is Artificial Intelligence Transforming the Modular Construction Market Landscape?

Artificial intelligence is revolutionizing the construction industry by enhancing efficiency, precision, and creativity. Autodesk is a company that is integrating AI into construction processes to boost productivity and reduce errors. Engineers in India are impacting this sector by designing AI capabilities for infrastructure projects. Hickory, an Australian building firm, has also established an advisory board to encourage AI adoption and creativity in modular construction to counter challenges such as labor shortages and sustainability.

Startups are also making tremendous strides in this field. Scalera.ai, a Swiss startup company, has developed an AI-powered assistant to streamline procurement and tendering procedures in construction, reducing manual intervention and enhancing efficiency. Automated Architecture (AUAR) in the UK is using robots to build homes, aiding in the housing crisis by building houses affordably on-site with portable "microfactories". These technologies reflect the global trend of integrating AI in construction to enhance productivity and keep up with heightened demands.