1.1 Definition and scope of the study

The market for modular construction, also known as prefabricated construction, refers to the construction of prefabricated buildings or containers (modules) directly designed and produced in the factory and then assembled on the construction site. Assembly makes it possible to create buildings capable of meeting occasional or permanent needs: site billets, offices, but also new forms of housing such as container houses. The modules or containers are usually made of steel, concrete or wood, equipped with plumbing, heating and electrical power. The interior finishes are specified at the exit of the production workshop and are more or less worked on according to the purpose of the building to be constructed.

Long thought mainly for the construction industry - for site staff in particular - modular construction has over the years become an important a credible alternative to the construction of single-family homes and offices.

Often, the modular construction enables the meeting of short-term needs to install buildings on a temporary basis when a building is under reconstruction or in rehabilitation, but also when an expansion in the need of offices or workshops appears in the tertiary sector.

Modular construction is therefore present in the construction sector in the state sector (emergency accommodation, sports facilities, school premises, etc.) and in the private tertiary sector (offices, shops and kiosks, events, health, etc.). The use of prefabricated construction in the residential sector has seen an important growth in the last years.

The world market for modular construction is booming. It should grow at a rate of nearly 6% per year until 2025. Italy, traditionally lagging behind the Anglo-Saxon countries in this market, has begun to catch up rapidly.

Indeed, the Italian market has increased five-fold since 2007.

This rapid expansion is due to the many advantages of modular construction in terms of production costs, construction time, ease of installation and respect for environmental constraints.

The main players on the Italian market are Wolf System, Imola Legno, Damiani-Holz, Wood Beton, Rubner Haus, Rubner Holzbau, and Rubner Objektbau (all three part of the Rubner Gruppe). However there are hundreds of manufacturers ranging from huge multinational groups to SMEs.

1.2 The global market

Advantages of modular construction

Modular construction is part of the broader real estate sector, of which it can be both a corollary and a substitute. Indeed, in addition to reducing the construction risk inherent in the development activities in real estate modular construction can offer several advantages:

Overview of the global ...

1.3 The Italian market

Prefabricated construction is part of the general construction sector. To fully understand this market it is important to first look at construction as a whole.

In Italy, construction is huge, valued at nearly *** billion euros (***). In **** **% of constructions revolved around maintenance and renovation, **% regarded new buildings and around *% the installation of ...

1.4 Imports & exports

The trade flows of prefabricated construction are recorded in the UN Comtrade database under the code ****: Building, prefabricated. From these statistics, we can observe that Italy is a net exporter of prefabricated buildings. In fact, in **** Italian exports of prefabricated construction amounted to $***.***.*** while it imported $***.***.*** worth of the same ...

1.5 The impact of COVID-19

The COVID-** pandemic had predictable effects on the construction and real estate sector. With the halt of economic activity, people fired or on furlough, less disposable incomes and chances for credit and need for construction these markets suffered. However, with the lockdown, the issues of greater comfort at home, increased wellbeing ...

2.1 For 'wood' measure

As mentioned above, according to FederBeton, and FederLegno, the syndicates for concrete and wood constructors in Italy, more than **% of modular constructions are for residential purposes, of which more than **% are made of wood, with concrete and steel prefabricated constructions mainly used in either large scale civil engineering interventions, large private ...

2.2 Single family homes reign supreme

As mentioned above the market for prefabricated construction revolves around residences, particularly in wood. Of non-residential buildings of this kind, public works and sports facilities represent **% of construction operations, followed by office expansion and on-site buildings.

Type of prefabricated constructions (***) Italy, ****, in % Source: ****

NB Public works are partitioned mostly between ...

2.3 Geographical distribution: North v the rest

Regarding many markets, there is an unequal distribution between the North and South (***) of the peninsula. This phenomenon is reproduced when speaking of prefabricated construction.

Regional breakdown of construction permits and prefabricated houses Italy, ****, in % Source: ****

NB Valle D'Aosta is not included due to the negligible amounts of both permits ...

2.4 Determining factors

Preference for sustainability

The building industry is a main contributor to the world’s carbon footprint. Approximately **% of carbon dioxide emissions are directly linked to construction. These are only the emissions regarding the construction, and do not take into account the pollution from expenses (***) which brings the total CO* contribution of ...

2.5 New trends in demand

The Italian prefabricated construction market is dominated by wood. As explained above, in Italy wood is a relatively cheap, plentiful and easily accessible resource. It is also more environmentally friendly and flexible in terms of construction purposes.

Despite already being very popular, the wooden prefabricated construction is increasing. Personalisation is a ...

3.1 Organisation and dynamics of the market

The production of modular buildings consists of the assembly of entire buildings in the factory from prefabricated modules that are then placed on foundations. According to the IFS the production is carried out in a local factory with the creation of entire apartment blocks or building site modules. Interior finishes are ...

3.2 Main players

The ** biggest companies control over **% of the market share regarding prefabricated construction. The most valuable of these is Wolf System with an annual turnover of almost ** million euros in ****. However, there are hundreds of companies ranging from large international (***) to SMEs with revenues of less than ***.*** euros per year.

Biggest prefabricated ...

3.3 Production system and its advantages

The production of modular buildings consists of the assembly of entire buildings in the factory from prefabricated modules which are then laid on foundations.

According to IFS Production is carried out in local factories with the creation of whole apartment blocks or building site modules. Interior finishes are also carried out ...

3.4 Product segmentation

By Application

Residential application: destined to provide homes for individuals This accounts for the largest share of the market, and it is likely to grow in the future Commercial application: designated to provide commercial spaces such as offices, showrooms, and hotels. It is highly dependent on the economic outlook of the ...

3.5 Manufacturers: high geographical concentration

Regarding the manufacturers of prefabricated constructions in Italy, the pattern is the same as the consumers with a large majority concentrated in the northern regions. In **** Lombardy had **% of manufacturers, followed by Trentino with **% (***), and Veneto with **%. * of the northern-most regions have over **% of manufacturers of prefabricated constructions. This can be ...

4.1 Prefabricated construction adapted to customer's needs

The prefabricated construction system is based on the construction of a wooden, metal, cement or mixed structure, made in * or * dimensions and which can be prefabricated (***). They can also be superimposed to obtain several floors.

This system is based on the manufacture of modular elements which occur between ** and ** % in the ...

4.2 Evolution of the construction sector due to technology

By ****, more than **% of modular construction companies will use *D printing for modular construction and **% of the work will be done by robots in construction [***].

A quick overview of the contributions of new technologies in modular construction is proposed

A masonry robot was created by Construction Robotics (***) to assist the mason ...

4.3 Prices

According to Idealista, a prefabricated house costs, on average, **-**% less than a 'traditional' house. This figure is lower than in other countries (***). Prices vary between *** and **** euros per square meter. These are truly dependent on the main material used.

A container costs between *** and *** € per square metre A wooden prefabricated ...

4.4 Pros & cons of prefabricated construction

Among the main advantages of prefabricated houses are the costs. As outlined above they are decidedly cheaper to build and in the long term in terms of bills (***), future interventions and durability are more economical than other type of constructions. Prefabricated houses, on average, are better thermically and acoustically isolated.

The ...

5.1 Construction regulations

Prefabricated homes, like traditional homes, must also follow building codes and regulations, and cannot be built without a permit or on non-contstructible land.

As mentioned, to build a prefabricated house you have to follow the same bureaucratic process of traditional houses, as it is to all intents and purposes construction. The ...

5.2 Environmental regulations

As with most industries and markets, here are increasingly tighter regulations regarding environmental protection, emission standards and more. The European Directive ****/** /EU set that by ** December **** all new buildings must be nearly zero-energy buildings. Zero-energy-buildings are buildings that dramatically reduce their energy consumption by adopting a smart design, using plants that ...

5.3 Subsidies and incentives

The Italian government is very generous when it comes to the construction or renovation of buildings that are aimed at reaching the targetted environmental goals. Naturally, the flexibility that is guaranteed through the construction of prefabricated houses allows this type of construction to fulfil the necessary requirements to benefit from the ...