Market Trends of North America Modular Construction Industry
This section covers the major market trends shaping the North America Modular Construction Market according to our research experts:
Hospitality Industry Driving the Market Growth
A shorter construction schedule means quicker occupancy for owners, and that means guests checking in months earlier than with conventional construction methods. Therefore, companies like Marriott Corporation have made modular construction part of their strategic plan. Cities such as New York are soon becoming home to some of the world's most ambitious modular hotels. The biggest hotel chain and well-recognized world luxury hotel brand -the International Marriott, is strategically expanding in North America based on modular construction. In the next few years, the company plans to build around 50 modular hotels in North America. AC Marriott plans to open the world's tallest modular hotel. A new 25-story AC Hotel by Marriott is planned at 842 Sixth Avenue, a very prestige location in Manhattan, New York City.
Due to the explosive interest and tremendous growth opportunities for the hotel and hospitality sector, the hospitality industry has been identified as a key market for the modular construction industry. The hospitality sector demonstrated the greatest growth in terms of number of units manufactured, from 1,487 units in 2018 to 1,955 in 2019. California was the strongest state for this market, followed by Kentucky, New Mexico, New York, and Texas.
Shoratge of Skilled Labour and Housing Constributiing to Market Growth
A shortage of skilled labor available for on-site work and increased pressure on project costs and schedules are primary reasons for the increasing popularity of off-site construction. In addition, improved technology allowing for greater applicability and customization, heightened concerns regarding safety and risk, and an increasing demand for higher quality were also stated as factors contributing to the growing interest in off-site approaches. Increasingly urgent demand in the housing, hospitality, and healthcare markets is also driving more projects to use modular construction. As many cities across the country are experiencing severe housing shortages, modular construction-with its potential to significantly increase the speed of delivery while also providing opportunities for cost savings-is seen as a strategy that's particularly well-suited to address the issue.
In the spring of 2018, the New York City Department of Housing Preservation and Development released a request for proposals for an affordable housing project in Brooklyn that requires modular construction methods. And according to Modular Building Institute, urban areas such as San Francisco, Seattle, and Vancouver are now considering modular construction as a means to address homelessness as well as to provide affordable housing for lower-and middle-income families.
