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Building Matters

The Path Forward for Offsite Construction

Considering the failure of past prefab manufacturers’ ventures, it stands to reason that slow and steady growth is the name of the game

Stephen Schwartz with an MEP Pod featuring electrical panels, solar switch, heat pump, air handler, water service hookup with pressure-reducing valve, submetering, tankless water heater, and a minisplit. All MEP components are on the exterior wall for easy maintenance.

As I have said during the course of this series on offsite construction, the sector has seen significant advancements, with countries like Sweden leading the global push toward modular building. While Europe and Asia embrace panelized and modular construction, the U.S. lags, accounting for only 5% of its housing market.

Despite these challenges, companies like Clayton Homes and Laing O’Rourke have achieved sustainable growth through gradual scaling and experience-driven strategies. However, barriers such as fragmented building codes and inconsistent market demand continue to hinder broader adoption.

In this final post, I will explore key challenges and potential strategies for overcoming them, aiming to unlock the full potential of offsite construction to address labor shortages, rising costs, and environmental concerns.

Global leaders

In Europe, the adoption of offsite construction has grown significantly. Sweden leads with 85% of its annual residential buildings constructed offsite; the Netherlands follows closely behind at 47%, and Belgium stands at 46%. Other countries, like Poland and Spain (34% each), France (24%), and Japan (20%), also show firm commitments to offsite construction. Even Germany (23%), China (20%), Italy (19%), and the UK (16%) have embraced this method more extensively than the United States, where offsite construction accounts for just 5% of the market.

These insights come from USP Marketing Consultancy, a market research firm specializing in construction trends. While the U.S. lags in percentages, the global embrace of panelized and modular construction points to a future where building processes continue to evolve toward efficiency and innovation, particularly in Europe and Asia. A recent New York Times article, “How an American Dream of Housing Became a Reality in Sweden,” laments that while offsite construction was invented in the United States, it has been more fully developed and exploited abroad.

Even so, Tennessee-based Clayton Homes is the second largest offsite homebuilder in the world, trailing only Japan’s Daiwa House.…

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One Comment

  1. Malcolm_Taylor | | #1

    Fernando,

    Thanks for this fascinating series. I think your insights and conclusions in this final blog make a lot of sense. Our provincial codes up here in Canada are attempting to harmonize and hopefully that will lead to an easier path for both pre-fab buildings and generic plans. It will be interesting to see how that affects the sector in the next few years.

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