In the transforming world of off-site construction, industrial players find themselves at a crossroads, between promising innovations and persistent challenges. Although the economic and environmental benefits of this method are undeniable, the sector continues to suffer from a lack of visibility on future orders, hindering its progress toward economies of scale. Strategic partnerships and commitments from large companies aim to stabilize this emerging market, but uncertainty remains a difficult obstacle to overcome for many stakeholders in this industry.
The off-site construction sector is undergoing a transformation, seeking to overcome economic and production challenges. Despite a global market impacted by a 4.4% decline in building permits for collective housing in the third quarter of 2024, initiatives are emerging to provide better visibility. In October 2023, ten clients pledged to dedicate 50% of their orders to off-site construction by 2031, estimated at 5 billion euros, in order to stabilize production. This approach is seen as a solution to the traditional limitations of the sector, with advantages in reducing nuisances and deadlines.
Industrials such as Vestack and TH are betting on order centralization and increased collaboration to ensure economies of scale. At the same time, strategic partnerships, such as TH with Bouygues Construction, demonstrate the importance of adapting traditional methods to modern requirements. Furthermore, players like Ossabois and Zen Modular are innovating by offering factory-less models, thus optimizing production flows.
R&D is a crucial pillar of this transformation, with projects supported by public funds aiming to reduce costs by up to 15% while promoting social and environmental benefits. Finally, a profound change in practices is necessary, particularly through the education of architects and engineers on the specifics of off-site construction, supported by the Filière Hors Site France association.
the visibility challenges for off-site construction industries
The recent difficulties faced by some players in the sector have highlighted the importance of off-site construction. Despite its numerous advantages, such as reduced timelines and nuisances on job sites, this method faces a persistent lack of visibility. In 2023, companies like E-Loft had to cease their activities, underscoring the challenges these industrial players face. The reasons go beyond simple economic difficulties, as they also encompass structural issues within the construction market.
strategies to maximize economies of scale
To overcome these challenges, some industrial players are turning towards standardization. Companies like Vestack illustrate this trend by focusing on construction models that allow the use of common materials across multiple projects. By ordering in bulk, they hope to offset the initial cost of design and achieve significant economies of scale. This approach, while promising, requires close coordination with partners to ensure a consistent production flow and avoid unexpected stoppages, which are often costly and disruptive.
Additionally, initiatives aimed at gathering several small entities under a single strategic direction are emerging. This model fosters a pooling of skills and resources, thereby streamlining the purchasing of materials and better regulating production cycles. This collaborative approach is supported by influential players ready to invest in innovation and technology to improve manufacturing processes. Fundraising becomes a powerful lever to boost this dynamic, offering a new perspective to industry players struggling to consolidate their growth.
the importance of partnerships to overcome the lack of visibility
The off-site construction sector understands that strong partnerships are essential to optimize operations and gain visibility. A relevant example is that of companies collaborating with industrial giants to benefit from both their experience and network. Bouygues Construction and Saint-Gobain, for instance, partner with specialized SMEs to share their knowledge and reduce long-term costs. This effectively illustrates the efficiency of collaborations across different levels of the industry, a model whose sustainability could be reinforced by increased public sector participation and better support from industry experts.
