Industry Trends

Permanent Modular Construction

Tuesday, August 9, 2022

Permanent Modular Construction (“PMC”), or off-site construction, is the process of prefabricating construction components in sections (or modules) off-site, most often at a large warehouse or factory, and then transporting those components to the site for a contractor to install.1

Globally, the PMC market is projected to grow from $75.89 billion in 2021 to $114.78 billion in 2028 at a compound annual growth rate of 6.1%.2

Generally, PMC projects allow contractors to concurrently perform activities that would normally be performed consecutively. 3 For example, in traditional building construction, contractors must wait until the foundation of a site is finished to begin constructing the vertical structures. However, with PMC, owners hire manufacturers to prefabricate vertical structures (e.g., prefabricated hotel room) and/or multi-trade utility racks off-site while the on-site contractor completes foundation work.4 Contractors can then deliver and install the prefabricated units once the on-site predecessor activities are complete.

Additionally, projects utilizing PMC can potentially mitigate construction site impacts such as permitting and weather delays since contractors perform a majority of prefabrication work offsite and in a controlled environment, which could allow for greater schedule duration predictability.5

Finally, PMC can be beneficial for projects in locations with limited space for staging and moving materials (e.g., urban developments) as it can reduce the need to stack or store a majority of the bulk construction materials.6

Other potential considerations for PMC projects include the following:

  • Does the project have uniform/standardized design elements? For example, structures with repeated design elements such as apartment buildings or hotels can be better suited for PMC compared to projects with more unique/non-repetitive design elements.7
  • Do the prefabricated units’ size and weight exceed local or regional transportation standards? Often, oversized and overweight loads increase shipping rates8 and require an extra level of planning and management to acquire appropriate permits,9 adding transportation costs compared to on-site fabrication with materials that are delivered separately. Additionally, shipping the prefabricated modules requires extra design considerations, and applicable costs, to account for the dynamic loads associated with transportation.10
  • What is the likelihood of design changes? On-site field design changes on prefabricated modules can potentially be a larger cost and time impact as compared to traditional on-site construction.11 Contractors may not be able to make alterations to prefabricated modules in the field, and the modules may need to be shipped off-site to complete required design change alterations.

The professionals at Breakwater are experienced in the analysis of construction claims stemming from PMC projects.

1: “What is Modular Construction?” Modular Building Institute,
2: Module Construction Market,
3: “Modular Construction for Chemical Mass Transfer Systems,” Koch Modular Process Systems,
4: “Prefabrication: Benefits & Drivers For Successful Implementation,”
5: “Modular Construction for Chemical Mass Transfer Systems,” Koch Modular Process Systems,
6: The Advantage and Challenges of Modular Construction,
7: The Advantage and Challenges of Modular Construction,
8: “Oversize Freight Shipping,”
9: “Oversized Load Regulations by State,”
10: “Off-Site And Modular Construction Explained,” Ryan E. Smith, 2016,
11: “Off-Site And Modular Construction Explained,” Ryan E. Smith, 2016,

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