The construction industry is at a crossroads, grappling with a global shortage of skilled labor, the need for increased efficiency, and the urgent demand for housing solutions. Amidst these challenges, modular, factory-built construction is emerging as a beacon of hope, with China leading the charge in volumetric modular construction. The global modular construction market is projected to grow from US$104 billion to US$131 billion by 2030, a compound annual growth rate (CAGR) of 4.8 percent. However, China’s modular industry is expected to surge at more than double that rate, with a CAGR of around 10.1 percent. This disparity underscores not just China’s industrial scale but also its strategic approach to fostering growth in this sector.
The Chinese government’s commitment to construction is a pivotal factor in this growth. With investments exceeding US$1 trillion, the government has directed substantial funds towards modular construction. By making bank loans more accessible to prefabrication-based companies, China is encouraging the development of advanced prefabrication technology, production facilities, and distribution networks. This support is further bolstered by the creation of Special Economic Zones (SEZs), which offer tax breaks, relaxed regulations, and other economic incentives to modular factories. These policies are not just for domestic companies; they also attract foreign investment, as seen with Stack Modular, half-owned by Bird Construction, and the Finnish-based Peikko Group, which has expanded its operations in China.
China’s modular construction prowess is particularly evident in its ability to address housing shortages. The country is not only meeting domestic needs but also exporting prefabricated residential buildings. The true innovation, however, lies in the larger residential, commercial, healthcare, and education sectors, where China’s modular construction demonstrates global leadership. The COVID-19 pandemic highlighted China’s modular expertise as multi-storey medical care units were assembled in days to manage the crisis. This capability was built on years of innovation. In 2015, BROAD Sustainable Building Co. Ltd, a subsidiary of the Broad Group, assembled a 57-storey, 90 percent factory-produced modular skyscraper in just 19 days. This feat was followed by even more impressive timelines, including a 10-storey apartment building completed in 28 hours and 45 minutes in 2021, and a 26-storey residential tower assembled in just five days in January 2024.
Key to this rapid construction is Broad’s Holon Building concept, which features foldable, container-sized units utilizing stainless steel. “We transitioned to stainless steel about five years ago,” said Jeremy Zimman, director of marketing at BROAD USA’s New Jersey office. “We realized the mechanical properties of stainless included not only non-corrosion, which is good for facades, but stainless steel also has a great ductility — the ability to withstand tensile stress.” This innovation, along with other advancements like the Intelligent Micro Bump Jacking Formwork System and the Design-Prefabricate-Transport-Assemble model, has been driven by the need to overcome the challenges posed by China’s towering skylines.
The success of modular construction in China is a testament to the power of scale, innovation, and government support. As John Bleasby, a freelance writer, noted, “Scale, innovation and massive government support have made modular construction successful in China.” This model offers valuable lessons for other regions, including North America, where similar challenges in housing supply and labor shortages are pressing issues. By adopting and adapting China’s strategies, North America could potentially revolutionize its construction industry, making it more efficient, sustainable, and responsive to urgent housing needs.
The global construction industry is at a pivotal moment. The lessons from China’s modular construction revolution offer a roadmap for addressing some of the most pressing challenges in the sector. As governments and industry leaders worldwide grapple with these issues, the time is ripe to embrace modular construction as a key solution. The future of construction is not just about building faster and more efficiently; it’s about building smarter, greener, and more inclusively.