Saudi Arabia and U.A.E. Modular Construction Market – Industry Trends and Forecast to 2031

Saudi Arabia and U.A.E. Modular Construction Market Analysis and Size

Ability to complete projects quickly compared to traditional on-site buildings is an important driver for the market growth. Growing emphasis on sustainability, quality, and worker safety and ease of disassembling, refurbishment and relocation of modular constructions are expected to propel the market growth. The major restraints that may negatively impact the market growth are lack of reliability on modular construction in earthquake-prone regions and fluctuating transportation costs for prefabricated modules. Increased support from government rules and policies and renewed focus on upgrading healthcare infrastructure are expected to provide opportunities in the market growth. However, lack of awareness regarding modular constructions is projected to challenge the market growth.

The Saudi Arabia and U.A.E. modular construction market is expected to grow significantly in the forecast period of 2024 to 2031. Data Bridge Market Research analyzes that the market is growing with a CAGR of 7.9% in the forecast period of 2024 to 2031 and is expected to reach USD 4,731,411.12 thousand by 2031, from USD 2,614,077.74 thousand in 2023.

Market Definition

Modular construction is a process in which a building is constructed off-site. The building is constructed under controlled plant conditions using the same design and materials to the same codes and standards as usually built facilities but in around half the time. Buildings are manufactured in “modules” that when put together on site, and specifications of the most sophisticated site-built facility and reflect the identical design intent without compromise.

Saudi Arabia and U.A.E. Modular Construction Market Dynamics

This section deals with understanding the market drivers, opportunities, challenges, and restraints. All of this is discussed in detail below:

Drivers

• Ability to Complete Projects Quickly Compared to Traditional On-site Buildings

Modular construction has been utilized for a long time in the construction of residential and many other commercial product types due to the quick delivery times for the assigned project. Modular buildings are constructed off-site in modules and brought to the site in flat-packed panels. Construction off-site is transforming the construction process for schools, commercial buildings, hospitals, and other segments, ensuring better construction quality management and quicker delivery times.

Modularization methods for construction can help perform several tasks simultaneously. Weather conditions have no major impact on the schedule, due to which the time required to complete a modular construction project is usually less than that of traditional on-site building methods. In addition, the production of prefabricated components for modular construction is highly automated and of higher quality.

Modular construction is a ready-made structure where limited intervention is required on-site and it could synchronized along with site work and foundation activity. This time-saving benefit keeps the project on schedule. It speeds up construction time while still being efficient, which is driving the market growth.

• Ease of Disassembling, Refurbishment, and Relocation of Modular Constructions

Modular construction is a process that involves constructing prefabricated buildings in off-site factories and transporting them to a worksite for installation. There is an opportunity to include a "plug and play" flexibility that allows molecular buildings to be easily modified for different purposes. Ease of disassembling helps to deconstruct into parts and can be reconstructed or redistributed to incorporate into various other projects. Molecular buildings designed for disassembly are easier to remove in a more controlled way, causing less environmental harm than building constructed and demolished using traditional construction methods. Modular projects are designed in such a way as to maximize sustainability or to meet a project requirement for future relocation.

Since the modular construction process happens in a controlled environment, it is easier to keep the amount of energy used during assembly to a minimum. Moreover, constructing modular spaces has the advantage of making piece substitution easier and more efficient in terms of waste production and costs, which is propelling market growth.

Opportunity

• Increased Support from Government’s Rules and Policies

Over the past few years, the governments of Saudi Arabia and U.A.E. have been increasing their spending towards shifting reliance from crude oil sector to enhancing the manufacturing output from sectors such as construction, automotive, and consumer goods.

The governments of Saudi Arabia and U.A.E. have confirmed plans for a revolution in housebuilding, office space, and other commercial spaces in their respective countries. The surge of investment by government is noticed in the recent years, therefore increased support from government and its regulations and policies are expected to act as lucrative opportunity for the market growth.

Restraints/Challenges

• Lack of Reliability on Modular Construction in Earthquake-Prone Regions

Modular construction is a revolutionary new method used to build homes and businesses. Modular homes can be found in earthquake and seismic zones, but the ability to sustain the seismic movement is quite limited. Assembling failure can lead to joint issues, leakages, or void spaces. Earthquake-resistant construction is the fabrication of a building or structure that can withstand sudden shock or shake by minimizing structural damage, human deaths, and injuries. Therefore, suitable construction methods are required to ensure earthquake-resistance design objectives.

Modular construction involves building prefabricated modules off-site, delivering them to the worksite, and assembling them to create a permanent structure at the place of installation. Therefore, the building is prone to earthquakes due to assembling the modules.

Therefore, the code-compliant design of a modular constructed building cannot stand and guarantee its resilience to earthquakes, which is restraining the market growth.

• Lack of Awareness regarding Modular Construction

Modular construction has long been a high-quality, versatile, environment-friendly building solution. One major challenge faced by modular construction is the lack of awareness among people for these prefabricated spaces. Many people have misconceptions about it, suggesting that modular buildings are temporary structures that are cheap and of limited use. However, modular construction offers a high degree of flexibility and design freedom.

There are several issues in the adoption of modular constructions, including initial high building costs, lack of understanding of the prefabricated method of construction, technical and installation hurdles, and the inability to find prefabrication businesses locally. These factors make the consumer more unaware of the benefits associated with the use of modular construction. Moreover, prefabricated modular construction solutions require a process-based approach for any building or project.

Prefabricated construction offers multiple benefits, such as cost, time, and labor savings, apart from consistent quality. Building houses and commercial buildings using precast-or prefab-concrete components made in factories offers significant convenience with cities growing fast. However, consumers are unaware of these benefits as the technology is still nascent in many parts of the world, such as Saudi Arabia, even though a few large projects are happening in a few metro cities. It is fast evolving with new machinery, new players from various parts of the globe, and domestic developers increasingly looking at prefabricated construction. It takes time for the governments to get into the regulatory mode. Therefore, the lack of awareness regarding the use and advantages of modular buildings is expected to challenge the market growth.

Recent Developments

• In September 2023, Bechtel Corporation announced the opening of a new regional headquarters in Riyadh, Saudi Arabia. This new regional headquarters reflects its strong and long-standing commitment to our customers and partners in the region
• In October 2022, Fluor Corporation was awarded a reimbursable front-end engineering and detailed design, engineering, and procurement services contract for Imperial. The company plans to develop a world-class renewable diesel complex at its Strathcona refinery near Edmonton, Alberta, Canada. The new complex will be the largest renewable diesel production facility in Canada and is expected to produce approximately 20,000 barrels per day
• In September 2022, DUBOX was shortlisted in the 'Residential Project of the Year' category of the 2021 Construction Week KSA Awards for The Red Sea Development Company for the second year. This enhanced the company's image in the market

Saudi Arabia and U.A.E. Modular Construction Market Scope

The modular construction market is categorized based on type, material, and end-user. The growth amongst these segments will help you analyze major growth segments in the industries and provide the users with a valuable market overview and market insights to make strategic decisions to identify core market applications.

Type

• Permanent
• Relocatable

On the basis of type, the Saudi Arabia and U.A.E. modular construction market is segmented into permanent and relocatable.

Material

• Wood
• Steel
• Concrete
• Others

On the basis of material, the Saudi Arabia and U.A.E. modular construction market is segmented into wood, steel, concrete, and others.

End-User

• Residential
• Hospitality
• Healthcare
• Education
• Retail and Commercial
• Office
• Others

On the basis of end-user, the Saudi Arabia and U.A.E. modular construction market is segmented into residential, retail and commercial, education, healthcare, office, hospitality, and others.

Saudi Arabia and U.A.E. Modular Construction Market Regional Analysis/Insights

The Saudi Arabia and U.A.E. modular construction market is segmented on the basis of type, material, and end-user.

The countries covered in the market are Saudi Arabia and U.A.E.

Saudi Arabia is expected to dominate the market due to growing emphasis on sustainability, quality, and worker safety.

The country section of the report also provides individual market-impacting factors and changes in market regulation that impact the current and future trends of the market. Data point downstream and upstream value chain analysis, technical trends porter's five forces analysis, and case studies are some of the pointers used to forecast the market scenario for individual countries. Also, the presence and availability of countries brands and their challenges faced due to large or scarce competition from local and domestic brands, the impact of domestic tariffs, and trade routes are considered while providing forecast analysis of the country data.

Competitive Landscape and Saudi Arabia and U.A.E. Modular Construction Market Share Analysis

The modular construction market competitive landscape provides details by competitors. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, production sites and facilities, company strengths and weaknesses, product launch, product trials pipelines, product approvals, patents, product width and breadth, application dominance, technology lifeline curve. The above data points provided are only related to the companies’ focus related to the modular construction market.

Some of the major market players operating in the market are Bechtel Corporation, Fluor Corporation, LAING O’ROURKE, Red Sea International, BK Gulf LLC (a Subsidiary of Dutco Group of Companies), SPACEMAKER KSA, DUBOX, Arabian Containers LLC, and Gulf Modular International, among others.

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