Image: Dreamstime/Alexander Kondriianenko
There are signs that modular construction is finally due to disrupt markets across the world with the UK one of the principal markets for growth.
That’s according to a new report from global management consultant McKinsey & Co called Modular construction: From projects to products, which predicted that the rise of modular construction is likely to create new winners and losers in the industry.
The scarcity and cost of labour would be two of the biggest predictors of where modular construction is likely to gain traction, the report claimed. It identified the UK, Australia, Singapore and the west coast of the USA as potential growth markets. It has already taken hold in Japan and Scandinavia. In the UK, offsite manufacturing has been used in about 15,000 new homes in 2018.
The report said: “In many countries, modular construction is still very much an outlier. But there are strong signs of what could be a genuine broad-scale disruption in the making. It is already drawing in new competitors – and it will most likely create new winners and losers across the entire real estate and construction eco-system.”
But it warned: “Capturing the full cost and productivity benefits of modular construction is not a straightforward proposition. It requires carefully optimising the choice of materials; finding the right solution between 2D panels, 3D modules, and hybrid designs; and mastering challenges in design, manufacturing, technology, logistics, and assembly.
“It also depends on whether builders operate in a market where they can achieve scale and repeatability. Public owners and regulators can facilitate a shift in the industry structure, too.”
It also highlighted the challenges still faced by manufacturers and the difficulties of scaling up: “The shift from onsite to offsite construction requires significant investment in manufacturing facilities – and companies will only undertake that investment when they feel certain there is a robust pipeline of projects to keep the facility humming over the long term.
“Shifting from traditional, familiar building techniques to more efficient modular prefabrication will require major changes – not only from modular manufacturers but also for developers, construction firms, investors, and the public sector.”
The full report can be read here.