MBI estimates that there are approximately 252 North American modular
manufacturers engaged in the commercial building market. This includes companies
that are primarily engaged in single-family modular home production but also do
some percent of multi-family and light commercial work. This also includes container
modification or fabrication manufacturers, which were not included in last year’s
report. MBI obtained revenue and production data from 45 of these companies for
this report, seven of which were classified as container fabricators.
Permanent modular buildings are considered real property, built to the same building codes and
requirements as site-built structures, and are depreciated in a similar manner. As such, the markets for
permanent modular construction are like the markets for site-built contractors, with few exceptions.
MBI has identified the following key markets for PMC in North America:
Modular construction offers the
ability to provide condominiums, apartments, student
dorms, and workforce accommodations in about half
the time as traditional, site-built construction methods.
More cities like New York City and San Francisco, as
well as countries like England, Singapore, and Hong
Kong are turning to modular construction to address
chronic housing shortages as costs continue to soar to
unattainable levels and reliable labor remains scarce.
A shorter construction schedule
means quicker occupancy for owners, and that means
guests checking in months earlier than with convention
construction methods. It should come as no surprise that
companies like Marriott Corporation have made modular
construction part of their strategic plan.
Education
From single classrooms to complete
campuses, modular construction offers public, private,
and charter schools what other construction methods
cannot: accelerated project timelines, more economical
pricing, and less site disruption. Permanent modular
schools are indistinguishable from other schools and
can be constructed to any architectural and customer
specifications. MBI members design and build schools of
all types and sizes using traditional building materials such
as wood, steel, and concrete. Virtually any size permanent
school can be built, installed, and ready for occupancy
in as little as 90 days. Perhaps most importantly, using
off-site technology, open construction sites are eliminated while school is in session. Students are safer, and teachers
can compete with less disruption.
Office and Administrative
Permanent modular buildings
serve as corporate headquarters, satellite bureaus,
institutional and administrative buildings, and offices for all
business types. Modern single- and multi-story buildings
can be configured in several ways to include independent
offices, conference rooms, elegant lobbies, kitchens,
restrooms, and large open spaces for cubicles or other
partition systems. MBI members have architectural and
engineering designs for workspace planning, storm water
management, landscaping, parking, and zoned heating
and air conditioning. If it is time to capitalize on company
growth, modular construction offers a fast, economical
approach.
Healthcare
Many hospitals and healthcare facility
contractors are turning to modular, primarily for building
components such as bathroom pods and headwalls.
However, entire hospitals have been constructed utilizing
modular construction techniques. Modular construction
offers quiet, safe, and clean applications for medical,
surgical, clinical and dental use.
The insight MBI contractors have from designing and
building thousands of medical facilities has resulted in
satisfied healthcare professionals the world over. If an
organization or community needs a new rehabilitation
clinic, emergency room, operating room, hospital
extension, laboratory, diagnostic center, or other medical
facility, remember that modular construction can be used
for custom-built facilities with the tightest budgets while
maintaining strict medical and aesthetic specifications.
Commercial & Retail
Simply put, quicker occupancy
equals quicker return on investment. Modular
construction is accelerated construction. Why is this so
important to banks, restaurants, convenience stores,
childcare centers, and other retail establishments?
Because earlier occupancy means a customer generates
revenue faster. In fact, it’s not uncommon for many
modular buildings to be up and running in as little as 24
hours—an important consideration for retailers of all types.
Typical retail applications include restaurants and diners,
banks, golf pro shops, convenience stores, gas stations,
car washes, and concession stands, to name a few. MBI
contractors provide a full array of services including
site, mechanical, and electrical work. Customers can
accommodate their emerging business with modular
buildings customized to their financial needs, space
requirements, and deadlines.
Institutional & Assembly
This market includes police
and fire stations, prisons, and facilities used for assembly
such as churches. While not a large market overall, some
modular companies specialize in these markets.
Statistics
MBI obtained revenue data from 45 modular
manufacturers including seven companies primarily
engaged in modifying shipping containers into buildings.
The average revenue among all manufacturers in 2017 was $14.2 million, down from the $15.5 million in the prior
year. Among the seven container companies, average
revenue was $2.3 million, while the average of the 38
remaining commercial modular manufacturers in this
dataset was $18.3 million. The industry generated nearly
four billion dollars in revenue and drove over seven billion
dollars in construction activity for year-end 2017.
MBI further analyzed 41 permanent modular construction
(PMC) projects completed in 2017 in key markets (six in
institutional, 13 in education, three in office, six in retail,
three in healthcare, and 10 in housing/hospitality which
included three hotels).
The average size of these projects was 24,087 sq
ft across all markets with an average of 169 days to
complete from the start of factory production until
occupancy. For the hospitality market, the average size
project was 68,210 sq ft. with an average of 207 days to
complete.
Of the 41 projects reviewed, no project exceeded a
one-year construction schedule from start to occupancy. While the retail projects were on the lower end of square
footage completed per day ratio, the projects were
completed in about three months from start to finish.
Summary
Without a doubt, the interest level for modular construction
has increased over the past year, driven largely by a lack
of skilled labor and high housing costs. MBI has compiled
comprehensive data and analysis on the North American
commercial modular market including regional production
and capacity, market share by segments, design
considerations, market drivers, the approval process, and
definitions.
Overall market share for commercial modular construction
increased slightly from 3.18% for 2016 to 3.27% in 2017.
Additional information about the North American
commercial modular construction industry, including
regional analysis, can be obtained in MBI’s PMC Annual
Report available at modular.org.
| Market |
Average Size |
Average Days to Complete |
| Multi-family |
71,859 |
166 |
| Hotel/Hospitality |
68,210 |
207 |
| Education |
14,539 |
161 |
| Retail |
3,180 |
95 |
| Office |
5,181 |
119 |
| Institutional/Assembly |
7,021 |
174 |
This article originally appeared in the Modular Advantage Magazine - Third Quarter 2018 released in September 2018.