Simply defined, modular construction involves manufacturing building components called “modules” off-site in a factory then transporting those components to the jobsite for assembly.

According to Mordor Intelligence, the modular industry’s market share in North America (currently at 78.91% of the overall market) has a forecasted Compound Annual Growth Rate of 5.06% in the next five years.

While “modular” (as it’s often called for short) has yet to achieve its full potential, both MBI’s annual report and another report by industry market research firm Fortune Business Insights found that it’s gaining traction in several key markets, including:

• Single-home and multifamily/student housing. As demand rises, modular offers a speedy and cost-efficient way to construct affordable housing when needed.
• Commercial, institutional and industrial. Modular’s design flexibility and quick turnaround make it an attractive option for new builds and expansions in certain industries. One specific example given was operational hotels.

What makes modular so attractive? First, standardized factory processes and efficient materials use can substantially cut costs. Factory settings, along with rigorous inspections, ensure consistent quality. And manufacturing modules off-site while preparatory sitework is done concurrently can shorten project timelines.

In addition, modular offers a positive environmental impact by producing less waste and enabling easier recycling of materials. Plus, controlled factory environments tend to be safer for workers and allow for better conditions, boosting productivity and potentially drawing more job candidates than traditional construction.

Various obstacles, however, have hindered modular’s widespread adoption. These include:

• Steep learning curves. Modular requires a different approach to sequencing, staging and coordination with infrastructure. Project teams need retraining to adapt to these new methods and develop consistent workflows, which can be time-consuming, costly and difficult.
• Negative impact on skilled trades. Because modules are often preplumbed and prewired, modular builds typically don’t require highly skilled workers. On the one hand, this can be an advantage in today’s tight labor market. On the other, excluding subcontractors in skilled trades such as plumbers and electricians doesn’t always sit well with project owners or the industry in general.
• Transportation challenges. Job budgets can easily get blown if modules require additional structural support for transport or if the factory is far from the jobsite.
• Leverage technology. Modular project teams should use the latest software to improve the design, manufacturing and assembly processes. The right technology, used effectively, can help identify and resolve issues before they become costly problems.
• Focus on workforce development. Everyone involved needs to invest in training programs to continuously improve workers’ skill levels.

Fortune Business Insights projects the global modular construction market to grow at a compound annual rate of 7.2% by 2034. However, for the approach to truly disrupt the construction industry, those practicing it will need to find creative solutions to the existing problems.

For construction teams looking to pursue modular projects, the MBI recommends the following best practices:

1. Tailor designs for modular.

Architects and designers should create plans that optimize modular’s strengths, including standardizing module sizes and addressing transportation challenges.

2. Collaborate early and often.

Everyone involved — from designers to manufacturers to contractors — should communicate from the get-go to ensure smooth integration and minimize delays.