The global Modular Construction market is estimated to be valued at US$131.1 billion in 2023 and is expected to reach US$ Mn in 2023, with a CAGR of 6.1% over the forecast period of 2023-2030, as per Coherent Market Insights.
Market Overview:
Modular Construction refers to the process of constructing buildings off-site in a controlled factory environment, and then assembling them on-site. This method offers various advantages such as reduced construction time, cost-effectiveness, quality control, and sustainability. The need for rapid urbanization, rising demand for affordable housing, and the advantages offered by modular construction are driving the growth of this market.
Market Key Trends:
One key trend in the Modular Construction market is the increasing focus on sustainable construction practices. With growing environmental concerns, the construction industry is adopting modular construction methods as it allows for efficient resource utilization, reduced waste generation, and lower carbon emissions. Additionally, modular construction promotes the use of green building materials and energy-efficient systems, further contributing to sustainability goals.
Porter's Analysis:
Threat of New Entrants:
The threat of new entrants in the modular construction market is relatively low. The industry requires significant capital investment and technical expertise, which acts as a barrier to entry. Additionally, established companies have strong relationships with suppliers and have already built a reputation with customers, making it difficult for new players to gain market share.
Bargaining Power of Buyers:
Buyers in the modular construction market have a moderate level of bargaining power. While there are a wide range of suppliers available, buyers often require customization and specialized solutions, giving suppliers more leverage. However, as the market becomes more competitive and standardized, buyers may have more power to negotiate prices and terms.
Bargaining Power of Suppliers:
Suppliers in the modular construction market have a moderate level of bargaining power. The industry relies on a wide range of materials and components, giving suppliers some leverage. However, as the market continues to grow, more suppliers are entering the market, increasing competition and potentially reducing supplier power.
Threat of New Substitutes:
The threat of new substitutes in the modular construction market is low. Traditional construction methods are time-consuming and expensive compared to modular construction. Additionally, modular construction offers advantages such as faster build times, cost savings, and increased sustainability, making it an attractive option for many buyers.
Competitive Rivalry:
The competitive rivalry in the modular construction market is high. The industry is fragmented, with numerous players competing for market share. Key players such as Laing O’rourke, Red Sea Housing, and Bouygues Construction have a strong presence in the market. However, as the market continues to grow, competition is expected to intensify.
Key Takeaways:
The Global Modular Construction Market Demand is expected to witness high growth, exhibiting a CAGR of 6.1% over the forecast period of 2023-2030. This growth can be attributed to the increasing demand for affordable housing, the need for faster construction methods, and the focus on sustainable building practices. The market is expected to reach a size of US$ 131.1 billion in 2023.
In terms of regional analysis, Asia Pacific is the fastest growing and dominating region in the modular construction market. The region is experiencing rapid urbanization, population growth, and increasing investment in infrastructure. Countries like China, India, and Japan are driving the demand for modular construction solutions.
Key players operating in the modular construction market include Laing O’rourke, Red Sea Housing, Atco, Bouygues Construction, Vinci, Skanska AB, Algeco Scotsman, Kleusberg GmbH & Co. Kg, Kef Katerra, Lendlease Corporation, and Cimc Modular Building Systems Holding among others. These players have a strong market presence and are actively investing in research and development to enhance their product offerings and expand their market share.
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