A new report from market research and advisory company Technavio revealed that from 2022 to 2027, America’s Modular Construction Market is slated to increase by $5.6 billion, a compound annual growth rate of 5.61 percent.
The most important factors fueling the market’s expansion during the forecast period are rising infrastructure initiatives and development projects. However, the market’s expansion is being hampered by the convoluted approval procedure for modular building. In the U.S., all building projects must adhere to all applicable municipal, state, and federal laws and regulations. In some state and local governments, the approval procedure for the construction of modular buildings is extremely drawn out. In locations where there is a strong union influence, approval and execution can be difficult. During the projected period, the market will experience slower development as a result of these challenging approval procedures. This is also one of the main reasons why the market is so fragmented.
Even with market hindrances and uneven growth, the projected increase in market demand is an indication that modular construction is finally overcoming its image problem. Though modular construction had long been stigmatized as “cheap” thanks to its association with mobile homes, the time-savings and swift return on investment has had developers of all asset classes embracing this type of construction.