Offsite construction used to mean trailers and temporary classrooms. Not anymore. In 2026 modular and prefab methods are delivering multi-story residential towers, full hotels, hospital wings and data centers, and the market has grown to somewhere between $111 billion and $183 billion depending on whose count you use, with steady 5% to 8% annual growth ahead.
The mix has shifted too. Permanent modular, the kind meant to stay, now makes up the majority of the work, roughly 60% to 70%. That’s a different business than the temporary-space rental that built the sector’s reputation. Factories are turning out finished bathroom pods, structural modules and prewired mechanical skids that show up on site ready to set.
Data centers force the issue
Nowhere is the pull stronger than in data centers. When AI demand spikes, owners can’t wait 18 to 24 months for a conventional build, so prefabricated data halls and power and cooling blocks have become the answer. Every major hyperscaler now leans on modularity to add capacity in increments. The modular data center slice alone is growing around 13% a year.
Hospitals follow the same logic
Healthcare has its own reason to build offsite: you can’t shut a working hospital. Fabricating patient rooms and headwalls in a plant cuts traffic, noise and risk around occupied buildings, and it pulls schedule out of projects that can’t afford to slip. The constraint is design discipline, since modular rewards repetition and punishes one-off changes. See our coverage of data center construction hitting $58B. Background via Data Center Dynamics and Trimble.