The European prefabricated buildings market is expected to grow with a CAGR of over 4% during the forecast period. The outbreak of the COVID-19 pandemic has led to severe uncertainty for vendors and contractors in the construction industry across Europe.
New York, Sept. 27, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Europe Prefabricated Buildings Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" - https://www.reportlinker.com/p06321489/?utm_source=GNW
Several construction companies shut down their projects due to lockdowns and restrictions. However, due to immediate requirements for hospitals and quarantine sectors, the demand for prefabricated materials witnessed an increase. Since a high workforce is required for traditional construction, opting for prefabricated buildings became an optimum solution during the pandemic.
The market is expanding as the demand for higher-quality, environment-friendly homes rises across the continent, with the United Kingdom and Germany accounting for the highest proportions. The adoption of additive manufacturing in Europe is expected to boost the prefabricated construction sector significantly. Companies are embracing environment-friendly products and production practices to set themselves apart from the competition. The introduction of energy-absorbing materials such as micro dwellings has resulted from the focus on energy efficiency.
Prefabricated housing demand is on the rise, as the building technique’s advantages are increasingly being leveraged by new home buyers in an improving economic and demographically charged marketplace. By the end of 2022, an estimated 70,100 units are anticipated to be sold across six Northern European countries, with the German demand representing a sizeable level, particularly for turnkey solutions.
Key Market Trends
Wooden Prefabricated Buildings Hold the Largest Share in the Sector
In Italy, the prefabricated market for wood goods is expanding, as seen by the increased production of cross-laminated timber (CLT). CLT output in the "DACH" region (Germany, Austria, and Switzerland), the Czech Republic, and Italy totals over 750,000 m3 and is increasing at a rate of more than 10% per year. In 2016, the Russian government established requirements for the use of wood in state housing programmed construction: 30% in 2018, 35% in 2019, 40% in 2020, and 45% in 2021.
The Segezha Group is the market leader in glulam-based construction in Russia. Sokol Timber Company, a Segezha subsidiary, is a large industrial home-building factory that primarily manufactures glued wood for export. Segezha Group began construction on a CLT manufacturing factory with a production capacity of 250,000 m2 per year in June 2019. The use of steel in infrastructure, housing, communal, and social construction is growing in Russia, owing to the high environmental friendliness of metal constructions throughout their life cycle and increased infrastructure investment. Timber building is becoming increasingly popular in France. It has traditionally accounted for a smaller percentage of all apartment buildings and has been reserved mostly for structures up to four stories tall. There are already an increasing number of projects underway for buildings with 7 to 16 stories that use timber for the shell or structure of the building. For the next 15 years, the city of Bordeaux in southwestern France has vowed to develop 270,000 square feet of wooden spaces per year. The Hyperion tower, an 18-story residential structure with CLT floors and walls, is one of the buildings leading the way. It will be one of the world’s tallest timber buildings.
Products created from various materials compete with precast concrete products. For example, precast concrete rail sleepers compete to some extent with rail sleepers constructed of wood, steel, and plastic in the rail sleepers market, which is the main end user of precast concrete. In France, wooden rail sleepers account for 15% of total rail sleepers in terms of volume (owing to a statute requiring 250,000 rail sleepers per year to be constructed of wood due to an agreement with the timber sector), while precast concrete accounts for 100% of the remaining rail sleeper market.
Increase in Investments in the UK Prefab Industry may Boost the Market
According to the National House Building Council (NHBC), the number of new homes registered to be built in the United Kingdom fell by 23.2% in 2021, to 123,151, the lowest level since 2012 (104,922). The NHBC also stated that new home registrations fell in every UK region in 2021, with the largest drops occurring in the second quarter. According to data from the Office for National Statistics, in the second quarter of 2021, new housing construction orders in the private market explicitly – seasonally adjusted, volume – were up by 4.6% quarter-on-quarter and 154.8% Y-o-Y, indicating that the order book for property developers is on the mend following the lockdown.
As the UK government plans to build around 300,000 new homes per year by 2022 to address the challenges in the housing market, prefab construction is expected to play a significant role there. In addition, in June 2019, the Worthing council gave permission to Ikea to build modular homes on the south coast in a joint venture with the construction firm Skanska. The two companies, Ilke Homes and Legal & General, have built factories to manufacture prefab homes. These two companies are transforming the prefabricated housing industry in the country with the production of two- and three-bedroom homes that range between GBP 65,000 to GBP 79,000. Ilke Homes pledged to produce 2,000 houses a year, eventually reaching 5,000. The insurance company Legal & General has built a vast factory outside Leeds, which would build 3,500 homes a year.
The European prefabricated buildings market is fragmented with many players. The market is highly competitive, with none of the players occupying the major share. Some of the major players in the market are Laing O-Rourke, Bouygues Construction, Skanska AB, Kleusberg GmbH, and Deutsche Fertighaus Holding.
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