What is Modular Construction?

Modular construction involves the offsite development of standardized components in a factory environment, using the same materials and following the same standards that guide onsite construction.

These components built in factories make up structures that are then transported to the site. There, they are assembled, giving a building its final shape.

Modular Construction in the US

The first appearance of this construction method was around the 1840s California Gold Rush in the United States. From there, modular construction has gained popularity in the American landscape since the early 1900s. At that moment, Sears Roebuck Co. had a catalog of more than 44 modular houses constructed from over 30 thousand pieces. 


Initially modular construction was mainly utilized for residential housing. Today modular construction is used for all types of projects ranging from data center construction to modular refineries and large multi family residential towers. 

How Does Modular Construction Work?

Modular construction takes place mostly in factory environments. The work carried out in these factories makes up for 60% to 90% of the total process. After development, the components are delivered to the site and assembled to make a complete structure or as modular subassemblies.


Modular structures can be either placed to function as a functional individual structure or combined to create different configurations. Inter module connections are the links that connect different units. These connections are responsible for turning individual modules into fully functional facilities. 

Types of Modular Buildings 

The end products of modular construction can be classified in two categories:

Permanent Modular Construction (PMC)

This type of modular construction uses lean manufacturing techniques and a variety of building materials such as wood, concrete, and steel, to prefabricate single or multi-story buildings. In addition, PMC can also contemplate the addition of windows, air conditioning, piping systems, etc. Many of these features can be installed offsite, saving time in future stages of the construction process. Furthermore, these modules can be assembled by themselves or connected to pre existing buildings, but are designed to remain in one location.

Relocatable Buildings

Relocatable buildings are designed to be reused and transported to different locations. They are built and/or assembled in factories following state regulations. In addition, everytime they are installed onsite, they follow its manufacturer’s guidelines as well as local regulations. Relocatable buildings are often used as medical clinics, construction site offices, classrooms, etc. 

What Are the benefits of modular construction?

The benefits of modular construction can be classified into the following categories:

  • Quality: Factory environments are better scenarios for thorough quality control and guidelines implementation. In addition, the materials and machinery used are protected from unforeseeable events such as adverse weather. Furthermore, if required, construction can be extended to a full-day process in order to meet deadlines.
  • Sustainability: Modular construction enables increased possibility of recycling and controlling inventories. WRAP (UK) estimates a 90% reduction in material waste in comparison to traditional construction. In addition, factory environments encourage the use of a wider range of materials that can be more eco-friendly than the ones traditionally used.
  • Safety: Aside from avoiding adverse weather conditions and site particularities, workers also benefit from factory environments in various ways. Medical attention is easier to access on a factory that’s also equipped with first aid supplies rather than on an average construction site.
  • Cost effectiveness: Since multiple manufacturing processes can be carried out at once and producing in series is a viable option, cost savings can be achieved through economies of scale. Large projects with multiple identical elements obtain considerable cost savings due to the amount of resources that can be cut off from the manufacturing process.
  • Renovation: As previously established, modular units can be assembled into existing structures or even relocated. These characteristics provide them with the ability to serve new purposes in different locations or be renewed to serve a different purpose than the one they were originally created for.
  • Speed: Modular construction can be carried out in parallel with traditional construction. In addition, its manufacturing processes lead to less rework. A research by TWI shows that modular construction offers time savings of over 50% in comparison to traditional construction.

The Current State of Modular Construction

Today, modular construction has an established presence in many countries, with particularly strong markets in both Japan and the Scandinavian region. According to McKinsey, modular construction in the US market has the potential to deliver annual savings up to $22 billion. The development of new technologies and use of new building materials improve key aspects of modular construction. From communications technology applied to logistics, to SaaS improvements in precision manufacturing, the possibilities of constructing and delivering high end modular units are constantly increasing.


Implementing cutting edge technologies will be the driving force towards an increase in modular construction implementation on a global scale. Staying updated regarding construction procedures and technology is fundamental in order to take advantage of all the benefits of modular construction.