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Modular Building Offers Big Promise for Productivity Boost, New Report Finds

Modular building offers big promise for the construction industry and could offer a major, much-needed productivity boost in the years to come. That is according to a recently released report from research company, McKinsey & Company, entitled “Modular Construction: From Projects to Products.”

While modular or prefabricated construction is far from a new concept, McKinsey’s report points out that “technological improvements, economic demands and changing mind-set mean it is attracting an unprecedented wave of interest and investment.”

Among the key findings of the recent report:
- The cost savings and productivity benefits of modular construction have the potential to deliver annual savings of up to $22 billion in the combined U.S. and European markets.
- Recent modular projects that McKinsey pointed to have accelerated project timelines by 20-50 percent over traditional methods.
- The market value for modular construction in new real-estate construction alone could reach $130 billion in Europe and the U.S. by 2030.
- Skilled construction labor shortages and large-scale unmet demand for housing are two factors on the U.S. West Coast that make the market more likely to further embrace modular construction.
- The “maturing of digital tools has radically changed the modular-construction proposition” in a variety of ways, McKinsey says, including by facilitating the design of modules and optimizing delivery logistics.
- The construction industry’s adoption of new, lighter-weight materials and various digital technologies that improve the productivity in manufacturing modular and that help with the logistics of it will also contribute to the growth of modular.