Does modular construction cost less?


The McGraw-Hill Construction SmartMarket Report on Prefabrication and Modularization surveyed contractors and found that 74% believed that usage of modular construction methods can help decrease project budgets, and nearly a quarter (23%) believe it can decrease budgets by 11% or more, while more than half of construction managers (53%) believe that purchase and installation costs are lower for prefabricated elements. 






How to determine the cost saving


The total cost to build is reduced by using modular construction primarily through a combination of the reduced time on site for installation as well as desnagging to meet the required quality standard (to find our more on the time benefits, click here, while you can explore more on quality here).  The critical aspect is that one needs to work with total costs.  A comparison at a bill of materials level only might suggest that modular construction is more expensive than conventional build options, but once the time and quality benefits are included, the total cost of modular is more favourable that its conventional counterpart.


It is important to note that if one is comparing a modular unit by compiling a bill of materials for the unit and then applying tendered rates on a complete project, the average rates for tiling, waterproofing or plumbing should not be applied to the bill of quantities in the bathroom as the most complex areas for these trades have been removed, so the rates for the balance of the build should come down if the quantities relating to the modular units were removed from the bill.

Total cost calculator

Click on the spreadsheet link to get a framework for comparing the total cost of modular units to conventional build.  You can then populate this with the necessary information relating to your project by filling in the green highlighted cells.  Please call us if you require clarification or assistance.

Click to go to next article: How does modular improve quality?