The market has remained subdued following a period of significant decline between 2008 and 2010, primarily due to the downturn in housebuilding activity. However, from 2013 onwards the recovery in the economy coupled with temporary shortages of aircrete blocks and bricks, have fed through to increased demand for MMC. However, from 2015 the market is likely to experience more modest growth rates as this situation changes.
The timber frame sector is by far the largest under review, with trends here largely underpinning those at the overall level. By value, the timber frame market was worth over £300m, with light steel framing, concrete and SIPs accounting collectively for around £110m. Key end use sectors for panellised modular building systems are houses, apartment blocks, schools, budget hotels, smaller healthcare and care facilities, and purpose built student accommodation. However, demand across the public sector has been impacted by cuts at central departmental, agency and local authority levels.
The industry has undergone some restructuring in recent years, with the exit of a number of major suppliers, particularly in the timber frame sector. Market supply is fairly fragmented, with no suppliers having dominant market shares - there are only three relatively large manufacturers of timber frame system that regularly report annual sales over £20m.
“We could see sustained recovery in the demand for panellised modular systems in the short to medium term, provided that key construction sectors continue to recover” said Andrew Hartley, Director of AMA Research. “The government’s pledge to support the development of up to 30,000 affordable homes in England and the general upturn in the housing market should mean that housebuilding will provide a key sector for growth.”
Another potential key driver is the government’s Modular Building Systems Framework, which should encourage the increasing specification of steel frame and timber frame modular building systems on public sector projects, and factors that should help overcome barriers to specification include the mandatory implementation of BIM across the public sector.
Taking these factors into account, forecasts for the short to medium term are for steady growth within the range of 3-5% per annum until 2018.
The ‘Panellised Modular Building Systems Market Report - 2014-2018 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.