Prefabrication and modular construction

Prefabrication and modular construction

Construction elements and modules are produced off-site in factory-like settings, transported to site and assembled there. The prefabricated units may be e.g. smaller elements in a façade or entire factory-fitted bathrooms.

The terms prefabrication and modular construction are often used interchangeably. Prefabrication refers to the manufacturing of construction elements away from the construction site and assembly on site. In principle, these prefabricated elements can be customized for the specific project. Modular construction specifically describes instances of prefabrication where the elements are standardized modules. Each modular unit can be e.g. a dorm room, a factory-fitted bathroom, or an element in a façade.

Prefabrication and modular construction is especially relevant if

  1. the building consists of multiple similar units (e.g. office rooms) and/or has a complex design that is difficult to construct on-site (e.g. special façade elements or steel frames)
  2. the construction site is very remote, or in a highly dense urban area.
  3. there is access to an efficient off-site production site
  4. the construction site planning is complex due to e.g. many stakeholders, limited space or time
  5. the construction site has a short build season, e.g. due to the climate, or is on very expensive land.

Benefits and challenges

  • Faster construction
  • Greater degree of predictability in cost
  • Less dependency of weather and site conditions (leading to higher productivity of workers)
  • Reduced material waste and transport carbon emissions
  • Increased safety to workers
  • Design options can to some extend be restricted by the use of standardised modules
  • Over-engineering e.g. wall thickness as several modules are assembled
  • Limited ability to change the structure through future renovations

Application examples

Scandibyg is a Danish market leader within industrially manufactured construction. They produce residential housing, office facilities and institutions by assembling prefabricated room-size modules on-site (

Baufritz is a European company based in Germany, which is well-known for producing sustainable turn-key homes based on modular elements, such as prefabricated timber frames (

Development stage

In Europe, the prefabricated housing market has been steadily growing up by 6.1% compound annual growth rate (CAGR) between 2014-17. Germany remains the largest market in Europe with about 25,000 units in 2017. The market is expected to continue growing in the coming years.

In contrast, prefabrication and modular construction for permanent buildings is an emerging market in North America.

Construction impact

The design phase is affected as the modules will somewhat restrict the number of possible designs. The construction phase will become more efficient, as more of this process will take place in factory-like environments.

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24 JULI 2024