Modular building techniques can transform construction lifecycle

Modular construction can save big on material and labor costs, besides also just being far more efficient. It is estimated that it has the potential to save the industry around 20% on costs and the need for on-site labor could be reduced by around 30%. But can the industry overcome obstacles to further adoption?

Sometimes also called prefabricated (or prefab) construction, modular construction is when parts of the structures are built off-site and assembled later at a building site. The components of building structures are typically created in a factory.

More widespread adoption of modular construction has huge potential for the construction industry. A new report from Bain & Company shows that these prefab construction techniques have the potential to save the industry big and can even be more sustainable.

Modular construction, besides being a more efficient method of building, can also cut construction times by 20% to up to 50%. That could be an incredibly attractive benefit for the construction industry in the Middle East, which is currently booming and where construction projects routinely face serious delays.

Prefab building also has the potential to be more sustainable than traditional construction. With the construction industry being a major source of CO2 emissions, this could be a big motivator for governments to pursue incentives and regulations designed to spur more prefab building.

In fact, that has already happened to some extent in Sweden and Singapore. Singapore benefited from a 2014 rule mandating state property be built using modular methods. Sweden, for its part, has seen modular construction result in 20% greater labor productivity and lower costs.

“Off-site modular construction promises to transform the construction industry, especially for large, greenfield projects where the benefits of standardization and efficiency can be fully realized,” said Houssem Jemili, partner at Bain & Company.

“If industry players can find ways to share transitional costs, then adoption of modular construction techniques will eventually increase, shifting profit pools. Companies that see the wave coming and can adapt their investment portfolios, design capabilities, or building techniques will be well positioned to make the most of it,” continued Jemili.

The construction industry, besides being the source of a major amount of harmful greenhouse gas emissions, is also a notoriously hard to abate industry. It is believed that the built environment is the source of around 39% of CO2 emissions and 40% of global material use.

A previous report from Strategy& found that pushing for more sustainability within the construction sector (and overall built environment) in the Middle East could eventually allow countries in the region to meet more than 50% of the their net-zero goals.