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This comprehensive study examines the world prefabricated housing industry by type and region. Historical data are provided for 2009, 2014, and 2019, with forecasts for the years 2024 and 2029. Data for prefabricated housing supply and demand are presented in units and are broken out by product type (manufactured and modular housing, temporary housing, and panelized and precut) for six geographic regions and 20 major national markets. Demand is also presented in dollars, while shipments data are given in units.
This study analyzes the worldwide market for prefabricated housing, including:
modular housing, including park models and units constructed from shipping containers
panelized housing, including those made of wood, light- or heavy-gauge steel, precast concrete, wood or metal sandwich panels, reinforced plastics, fiberboard, or ferroconcrete
precut housing, including those made of wood, light- or heavy-gauge steel, precast concrete, wood or metal sandwich panels, reinforced plastics, fiberboard, or ferroconcrete
Prefabricated disaster relief homes are included in the study as long as they do not have the appearance of tent-like structures and are likely to be used beyond a temporary basis.
Excluded from the study are:
traditional site-built homes using some prefabricated building components (e.g., pre-hung windows or doors)
prefabricated structures used for nonresidential purposes
any temporary housing that resembles tent
Data from the US Census Department were consulted in the preparation of this study and a list of related codes is presented here for informational purposes. However, these codes may not include all products covered in this report or may exclude some products of interest and the data have thus been adjusted accordingly.
Historical Prefabricated Housing Market
Global demand for prefabricated housing generally increased each year during the 2009-2019 decade. During this time, growth for prefabricated housing was driven by:
increasing use of prefabricated housing to address housing shortages in developing countries
a recovering single-family housing market in the large US housing market, where prefabricated housing products began gaining broader acceptance as competition for site-built homes
rising acceptance among more affluent consumers:
On the higher end, prefabricated housing’s customizability and fast construction times better enable it to compete with site-built construction.
On the lower end, consumers looking for basic housing favor prefabricated options as nicer than alternatives such as self-built homes.
Impact of COVID-19 Pandemic
The COVID-19 pandemic had an immediate negative impact on the global prefabricated housing market in 2020. Global housing starts fell at a pace not seen in decades, as both developed and developing economies were hit hard by the pandemic. A combination of mass quarantines, government imposed shutdowns of economic sectors, and high unemployment have led to a poor housing market in 2020:
In the US, ongoing construction projects were considered “essential” in most statewide shutdowns that occurred in March-May 2020, but fears of a poor market performance caused uncertainty and slowed building during that time. Later in the year, unexpected strength in the housing market led construction, particularly of single-family housing, to resume. However, residential construction faced supply chain issues and high material prices throughout the year, which inflated the cost of new home construction.
In Europe, as in the US, many construction projects halted at the onset of the pandemic due to uncertainty about the market and the safety of employees. However, the scope of shutdowns varied. In Germany, the “contact ban” exempted construction, but in Spain and Italy – two countries hit hardest early on – construction was considered “nonessential” and shuttered. Construction was largely exempt from the second round of shutdowns later in the year.
In India, the nationwide lockdown in March and April prohibited construction activity. Though some projects were permitted to resume in May, other localities kept lockdowns of varying strictness in place deep into the year. The loss of work deeply impacted India’s migrant construction workers, many of whom went home and left builders with a smaller workforce.
In Japan, a number of construction projects were voluntarily put on hold during the month of April following the government’s emergency declaration, but work began again in May.
New Housing Trends
The most important driver of demand for prefabricated housing is the outlook for new residential construction activity, as this reflects the underlying potential market for prefabricated products, which compete against site-built homes.
The outlook for the new housing market through 2024 will differ across regions:
The fastest annual increases in new housing activity are expected to occur the Africa/Mideast region, driven by above average advances in population and household formation as well as ongoing rural-to-urban migration.
In other developing parts of the world, including Asia and Central and South America, major markets such as India and Brazil will support regional gains as others in the region struggle to keep pace.
New housing construction levels are expected to decline in Western and Eastern Europe, where the industries were already coming down from cyclical highs before the COVID-19 pandemic exacerbated market weakness in the beginning of 2020.
The market in North America has a more positive outlook than that of Europe, buoyed by continued strength in new multifamily housing construction in Canada and Mexico. The large US housing sector was already cooling from a cyclical high when the COVID-19 pandemic exacerbated losses in the beginning of 2020, with multifamily housing construction most affected.
Housing construction in China – which accounts for 25% of the global market – will stagnate as gains in the large multifamily housing sector are offset by continued losses in the construction of single-family units.
Global demand for prefabricated housing is forecast to climb 1.1% per year to 3.9 million units in 2024, when value demand will reach $204 billion. Gains will be driven by:
the shortage of affordable housing throughout the world, which will support demand for inexpensive prefabricated units
rising awareness of the high customizability and short construction times that prefabricated housing offers
solid gains in new housing construction in India and the Africa/Mideast region
efforts of prefabricated housing builders to incorporate many of the features of site-built homes into their properties to enhance their curb appeal
increasing income levels and government efforts to improve housing quality in many developing countries
rising popularity among affluent consumers
However, declines in new housing construction in Western Europe and Eastern Europe, as well as significant slowdowns in construction in the US, China, and Japan will restrict demand growth for prefabricated housing.
COVID-19 to Cause a Dip in 2020 Market, Slowing Average Gains Through 2024
The COVID-19 pandemic in 2020 plunged the global economy into recession and led to declines in new housing construction in many countries, as lockdown measures and the need to adjust construction practices to accommodate greater social distancing stopped or slowed projects around the world in the first part of the year.
Anticipated declines in new housing construction in Europe and Japan, where the pandemic exacerbated preexisting weakness, will particularly affect global demand for new prefabricated housing, as these countries are major outlets for prefabricated homes with market penetrations well above global averages.
Additionally, longer term slowing in overall construction activity in China will continue to cause declines in demand for temporary housing, which is used to provide shelter for construction workers during long-term projects throughout the country.
Shortage of Affordable Housing in Many Countries to Boost Interest in Prefabricated Housing
Currently, housing shortages exist in many emerging markets throughout Central and South America, the Asia/Pacific, and the Africa/Mideast. Interest in prefabricated housing has been rising in countries like Brazil and India, as it offers a faster, more affordable solution for expanding and upgrading the housing stock than most traditional housing.
Additionally, the large Chinese market for these products is undergoing a shift. Demand for temporary housing, which has long dominated the prefabricated housing market, is declining as building construction slows. However, the government is looking to improve housing quality and affordability, leading demand for other prefabricated units to expand quickly because they offer quick, affordable solutions for both single-family and, increasingly, multifamily homes.