News + Ideas

Sourced from Mann Report, June 2025
By Amanda Goldsmith

Modular construction has emerged in recent years as a transformative approach in the construction industry, offering significant advantages in efficiency, cost savings andsustainability. As a result, it is becoming increasingly important for developers, investors, project managers, architects and contractors to recognize its potential and how it can revolutionize project delivery across nearly every asset class and sector. While this method has been more widely adopted across industries such as residential, commercial, hospitality, healthcare and educationdue to its promise of greater efficiency and sustainability, it also comes with challenges that must be weighed.

Advancements Fueling Growth
Initially, modular construction was associated with low-quality or temporary structures; however, modern innovations and research have disproved this notion. In fact, today’s prefabricated buildings are made with the same high-quality materials and construction methods as traditional buildings. These buildings are often indistinguishable from their conventionally built counterparts in terms of aesthetics and functionality, and with advancements in design and a growing understanding of the technology, modular construction is now considered a durable and reliable building method that can meet the needs of a variety of industries.

Cost Efficiency and Quality Control
Industries are now turning to modular methods for a variety of building types, ranging from single-family homes to large-scale commercial developments. One of the key reasons forthe shift is the significant cost savings associated with modular construction. Because much of the construction process takes place in a controlled factory environment, it is less susceptible to the variables that often lead to cost overruns in traditional construction, such as weather delays, labor shortages, and site- specific complications.

A more streamlined process allows for greater efficiency, faster timelines and, ultimately, more predictable project costs — all of which are major selling points for developers and clients alike.

In more specific terms, modular construction can reduce project timelines by 20% to 50% compared to traditional methods, which translates to significant cost savings for developers and project owners. These savings are further bolstered by a decrease in on-site labor costs and the reduction of waste generated during the construction process.

Additionally, the controlled environments in which modular construction takes place lead to higher quality control and consistency. In traditional construction, the quality of work can vary depending on the contractor, site conditions and environmental factors. With modular construction, all aspects of production are conducted within a factory setting, allowing for precise quality control and faster production times.

Sustainability Benefits
Controlled factory environments lead to less waste than traditional building methods, as construction waste is minimized when materials are purchased and used in bulk. Moreover, any waste produced can often be recycled or repurposed. This can result in waste reductions of up to 90% compared to conventional construction methods and, combined with the energy-efficient designs often incorporated into modular buildings, makes it an appealing option for environmentally conscious developers and clients.

These environmental benefits extend beyond waste reduction; by reducing the amount of on-site construction, modular construction also lowers the carbon footprint of a project. Traditional construction sites require a large number of workers to be present at various times, resulting in increased transportation emissions and on-site energy use.

Modular construction, on the other hand, reduces the number of workers needed on-site, as the majority of the work is completed in the factory. In addition, since modular buildings are often designed

to be energy-efficient, they can help reduce long-term energy consumption and operating costs.

As sustainability remains at the forefront of the construction industry, modular construction provides a solution that both meets the needs of the clients and contributes to a greener, more sustainable future.

Challenges in Regulation and Logistics
Modular construction does come with certain challenges, particularly as they pertain to regulatory hurdles and logistics. Building codes and regulations can vary significantly depending on location, and modular construction projects may require additional permits and approvals. While many jurisdictions have become more accepting of modular methods, project managers must still navigate the complexities of ensuring compliance with local building codes, zoning regulations and other legal requirements.

Further, while inspections are now often carried out during the factory process, on-site inspections may still be required, adding another layer of complexity. Ensuring all regulatory requirements are met while adhering to the modular building process is a key responsibility for project managers involved in these types of projects.

Logistically, the transportation and assembly of prefabricated modules can also present unique challenges. Modules are often large and bulky, for example, which means that they require specialized transportation and equipment. Depending on the site location, these modules may also need to be transported over long distances, which can add time and cost to the overall project.

Once modules arrive on-site, assembly workers must remain carefully coordinated to ensure a smooth and timely installation. This requires ensuring the site is ready for the modules to be placed and that the necessary personnel and equipment are available for the installation process. Although these logistics can add complexity to a project, the benefits of modular construction often outweigh these challenges.

As modular construction continues to evolve, its potential to transform the building industry becomes clearer. With its cost savings, time efficiency and environmental benefits, it comes as no surprise that more sectors are embracing this innovative approach. The versatility of this method makes it an attractive option for developers and project managers alike, and as the demand for sustainable and efficient construction grows, modular construction is poised to play a key role in shaping the future of the industry.