Five drivers leading to the expanding use of modular construction

Buildings are at the core of communities and essential to daily life. Policymakers, building owners and the public expect a lot out of buildings from protection from hazards, to energy and water efficiency, all delivered in a cost-effective manner. While not a new construction process, modular construction has gained interest as an approach to provide greater quality, enhanced building performance, greater affordability and speed to market, while providing solutions for the strained construction workforce.

What is modular construction?

Modular construction involves prefabricating building components, called modules, in a controlled factory setting. Teams then ship these modules to the final worksite to assemble them and perform final work like interconnecting wiring and plumbing. The process more closely resembles manufacturing than traditional construction.

Building modules in controlled, off-site environments prevents weather-related delays and enables far less waste and more precision. These improvements translate into substantial monetary and environmental benefits.

Modular approaches to construction go back as far as the 16th century and include notable examples such as the Sears & Roebuck kit homes of the early to mid-1900s and the Contemporary Hotel in Walt Disney World which opened in 1971. However, it has remained a niche movement for much of its history. As the need for change in the construction industry has become more evident, this movement has gained traction. The share of total modular construction projects grew by 51 percent between 2015 and 2018 and has since seen even more adoption in the last few years.

So, what’s driving this new attention to modular construction?

• Speed to market
• Lower production costs and better control over quality and work conditions
• Construction labor shortages
• Scalability
• Rising consumer demand
• Lower environmental impact

Modular approaches aligning with the immediacy of COVID response

It’s hard to overstate the impact the COVID-19 pandemic has had on the construction sector. While it initially meant widespread delays and shutdowns, these obstacles spawned improvements. Modular construction owes much of its recent growth to skyrocketing demand amid the pandemic.

As hospitals and testing centers grew overcrowded, modular was the obvious choice for fast expansion. Construction crews built independent modules to add to existing buildings, helping them accommodate more occupants. Since modular methods reduce project lead times by as much as 50 percent, these expansions take far less time than conventional solutions.

This speed also helped serve a booming housing market that arose from the pandemic. Low mortgage rates pushed people to buy homes while many companies faced backlogs and historical underbuilding. Amid the resulting shortage of 6.8 million housing units, modular provided an ideal answer.

A shifting labor market

Recent labor challenges in the industry have also contributed to an increased interest in modular construction. Over the past few years, older workers have been retiring faster than new workers have entered the sector. As a result, the U.S. now needs more than two million new workers over the next three years to meet demand.

Modular construction provides a solution to this shortage by enabling more automation. While automation is challenging on a traditional, unpredictable worksite, the controlled factory settings of modular construction are ideal for automation. New technologies like artificial intelligence can supervise off-site prefabrication as human workers attend to needs on the final worksite.

As a result, modular construction lets teams complete more work in less time despite having smaller workforces. As automation technologies improve, these opportunities will only grow.

Growing environmental concerns

The sustainability benefits of modular construction also play into its rising adoption rates. High waste levels and reliance on heavy machinery impact sustainability in the construction industry. Modular methods remove some of these challenges.

Since much of the work in modular construction takes place in controlled environments, it enables higher precision. As a result, projects involve far less rework, producing less material and energy waste. Factory settings also let teams use electronic equipment which can draw power from renewables instead of diesel-powered heavy equipment.

A recent survey revealed that 47 percent of construction and engineering executives say sustainability is a leading concern. As this trend grows, the environmental benefits of modular construction will drive its popularity further.

Affordability

Another factor driving modular construction to become the new normal is its affordability. Shorter build times and virtually eliminated rework translate into cost savings. As a result, modular construction can cut costs by 20 to 30 percent in some situations.

Quick project lead times also let construction firms experience a faster return on investment. Firms can then start new projects sooner, and if they keep using modular methods, continue to generate higher profits in less time. Considering how budget overruns are almost standard in the industry, these quick turnarounds and cost savings are hard to ignore.

This affordability also appeals to new homebuyers. Modular construction will help meet the demand for affordable housing, an area that traditional methods have struggled with in recent years. Lowering housing costs will help construction companies keep attracting customers in the future, ensuring the ongoing growth of modular construction.

Scalability

The scalability of modular construction has also helped its rise to mainstream adoption. Adding modules to existing buildings is far less disruptive than traditional construction, making it an ideal way to expand. Teams can construct modules off-site without disrupting daily operations, then add them once complete.

This scalability helped hospitals expand at the height of the pandemic. Soon after, some construction groups began working on affordable housing projects using the same concept. Modules can provide quick, affordable shelter.

These techniques could help businesses scale up their operations at minimal cost in the future. As the economy picks up and companies grow, modular construction will become even more popular.

Modular building techniques continue to grow

While modular methods are technically centuries old, this practice could be the construction industry’s future. Its affordability, scalability, sustainability, speed and ease of implementation offer solutions for many of construction’s long-lived issues. Within the next few years, modular techniques will continue to grow. Construction firms and their clients alike will see considerable benefits from this trend.