Behind the scenes of the modular construction building process: a…
Modular construction in Europe: a growth industry
Modular construction in Europe: a growth industry
In previous blog articles, we have talked about projects as far afield from our Spanish base as Kenya and Colombia. But today, we want to talk about things a little closer to home – the modular construction industry here in Europe.
Recent growth in Europe
Recently, the European modular construction industry has seen a big increase in growth. This new way of building has become popular because of its ability to provide express housing solutions by streamlining project timelines, enhancing construction quality and delivering substantial cost savings.
As more and more people need affordable homes, offices, and infrastructure, modular construction (including prefabricated houses and steel building solutions) has emerged as a sustainable solution, contributing to the industry’s remarkable expansion.
So what do experts reckon about the future of the industry? Let’s take a look.
Just the beginning – growth projections for modular construction in Europe
Wherever you look, growth projections for modular construction in Europe are extremely healthy. According to Fortune Business Insights, the European modular construction market is on a trajectory of robust growth, with a projected CAGR of 5.8% during the period 2023-2030. Fortune also anticipates that the market will reach a staggering revenue of USD 27.3 billion by 2030.
Inkwood Research is even more optimistic for the industry, forecasting a CAGR of 6.65% and predicting revenues of USD 45.8 by 2032.
This is even more remarkable when you consider that traditional construction companies have struggled with logistical issues and rising costs since the beginning of the COVID pandemic, leading to many bankruptcies in its wake.
Why is modular construction booming in Europe?
Our previous blog articles have outlined many of the reasons for the popularity of modular construction around the world, which include:
- Reduced building times
- Increased quality control
- Significant cost savings
- Sustainability
- Adaptability
But what are the particular factors driving modular construction in Europe?
Addressing housing shortages
Many countries across Europe find themselves faced with growing populations, an acute shortage of suitable housing stock and tight budgets.
In the United Kingdom, the government has set a target of building 300,000 new homes per year by 2025. Modular construction is seen as a key method to achieve this goal. Germany has also seen a rise in this type of construction, particularly in hotel and student accommodation sectors.
Similarly, Spain is recognising the benefits of off-site solutions, with industry experts advocating for government support through incentives and subsidies.
Meeting e-commerce storage needs
E-commerce is booming across Europe, and modular construction is helping to address the escalating storage demands of this growing sector. Pre-engineered building units can be customised to create storage facilities tailored to specific requirements.
The off-site construction process minimises weather-related delays, allowing for quicker and more efficient construction. Thanks to this versatility, modular construction is the preferred choice for a wide range of storage needs across Europe, from small sheds to expansive warehouses.
Infrastructure development
In addition to providing fast and flexible housing solutions, modular construction is also used for important infrastructure projects. Whether it’s making bridge pieces in advance or quickly putting up temporary roads and railways, modular construction is fast and flexible.
And it’s not just for temporary stuff; modular construction is ideal for constructing permanent roads, railway stations, and tunnels. This flexibility is why more people in Europe are choosing modular construction.
Not all roses – challenges to the industry in Europe
However, it’s not all plain sailing for the prefab industry in Europe. Despite the growth of the sector in recent years, economic fluctuations and geopolitical factors are posing challenges.
Recession in Europe and the Russia-Ukraine war are two of these challenges.
The European market saw a big drop in demand for modular construction products last year due to the economic downturn and the overall slowdown in construction. During a recession, governments tend to prioritise spending on areas like healthcare and social welfare instead of infrastructure projects, including modular construction.
The ongoing war between Russia and Ukraine is also causing uncertainty in the market, making businesses hesitant to invest in modular construction projects. The war has disrupted supply chains, especially for materials imported from these countries, leading to delays and higher costs for modular construction projects.
These factors might limit the growth of the market.
Modular construction in Europe – it’s here to stay
The European modular construction industry is not merely experiencing growth; it is reshaping the future of construction by providing innovative, efficient, and sustainable solutions.
As the demand for affordable housing, infrastructure, and e-commerce facilities continues to rise, modular construction stands at the forefront, offering a promising path forward.
With governments endorsing and investors recognising its potential, the modular construction industry in Europe is poised for a transformative decade, heralding a new era in construction practices.
If our blog post has left you wanting to know more, contact House-Matic to find out how we can help you with affordable, adaptable prefab solutions!