Rising Urban Population and Green Incentives Fuel China's USD 76.1 Billion Prefab Construction Surge

According to the latest market research study published by P&S Intelligence, the China prefabricated buildings market was valued at USD 40.8 billion in 2024 and is forecasted to surge to USD 76.1 billion by 2032, expanding at a strong CAGR of 8.3% during 2025–2032. This growth is primarily driven by robust government support for infrastructure development, the rapidly increasing urban population, and a growing demand for sustainable, cost-effective, and labor-efficient construction solutions.

China’s ambitious green infrastructure regulations, along with supportive initiatives such as tax incentives, low-interest loans, and green building certifications, are catalyzing the adoption of prefabrication. The government’s 14th Five-Year Plan mandates that at least 30% of new urban construction by 2025 be prefabricated, underscoring the sector’s strategic importance. Provinces like Zhejiang, Jiangsu, and Guangdong have launched pilot projects involving hospitals and schools to reinforce this approach. Furthermore, China’s urbanization rate—rising from 19% in 1980 to 64.6% in 2023, and projected to surpass 70% by 2030—is fueling the need for scalable, efficient housing and infrastructure solutions.

Key Insights

• The panel system dominated the product segment in 2024 with a 35% market share, owing to its user-friendly assembly, flexible designs, and fast deployment, ideal for large-scale residential and commercial construction.
• Cellular systems, featuring factory-built kitchen units and bathroom pods, are set to grow at the fastest CAGR of 8.3%, favored in sectors like healthcare and hospitality for their superior quality and efficiency.
• Among applications, the residential sector held the largest share at 40%, supported by urban migration and government programs for affordable rental housing in top-tier cities.
• The commercial segment is poised for the highest CAGR of 9.5%, driven by increasing demand for offices, hotels, and educational facilities, especially in cities such as Shanghai, Beijing, Shenzhen, and Chengdu.
• Bathroom pods led the module category with a 55% share in 2024 and are projected to maintain the highest CAGR of 10%, due to their time-saving, labor-reducing features and suitability for major projects.
• Concrete materials were the most preferred, accounting for 55% of the market, thanks to their durability, strength, and thermal efficiency, particularly in large residential and commercial structures.
• Metal-based prefab structures will witness the fastest growth at a CAGR of 9.2%, driven by their lightweight, ease of assembly, and rising demand in warehouse and factory construction.
• East China emerged as the dominant region, with a 35% market share in 2024 and the fastest CAGR of 8.5%, backed by favorable policies, robust infrastructure, skilled labor, and access to seaports.
• Major cities like Shanghai, Guangzhou, and Shenzhen are key hubs, benefiting from advanced technologies, public investment, and regional subsidies for sustainable construction.
• The market remains highly fragmented, with local players offering modular components like steel frames and panels. This fragmentation leads to diverse quality levels but fosters healthy competition.
• Key manufacturers include CIMC Modular Building Systems, Hangxiao Steel Structure, Ningbo Deepblue Smart House, and Guangdong Linghe Composite Material, among others.
• Recent industry developments include CIMC's modular student residence project in Hong Kong (Dec 2024), a partnership with China State Construction for modular steel structures (April 2023), and a sustainability-focused collaboration with Eternal Tsingshan Group (July 2023).
• Notable private-sector projects such as Mini Sky City (Changsha), Unicorn Island (Chengdu), and modular housing in Shenzhen exemplify the scalability and innovation in prefabricated construction.
• The adoption of digital tools such as Building Information Modeling (BIM) and Life Cycle Assessment (LCA) software is enhancing project efficiency, reducing full-cycle emissions, and aligning with China’s Dual Carbon Goals.
• The construction sector emitted over 430 million tonnes of carbon in 2022, prompting aggressive government action plans to promote energy-efficient building practices across residential and commercial developments.