Is prefabrication the key to solving 21st-century construction challenges?
Prefabricated buildings are making waves as a sustainable breakthrough today, but what does this construction method really involve? Let’s take a closer look!
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What is prefabricated construction?
Prefabrication, as the name suggests, involves assembling building components off-site before transporting them to their final location for installation.
In traditional construction, raw materials are brought to the site, where everything is built from the ground up. Prefabrication flips this approach—only the foundation is constructed on-site, while key sections are pre-built elsewhere and then delivered for assembly.
Fun fact: In civil engineering projects like bridges and dams, steel frameworks as long as 37 meters are often prefabricated and transported to the site, streamlining construction and reducing on-site work.
What’s the difference between prefabricated, industrialized, and modular construction?
The main difference between modular, prefabricated, and industrialized construction lies in how and where building components are manufactured and assembled:
- Industrialized construction: Focuses on standardized industrial processes to efficiently produce building components or modules while minimizing waste. This approach is truly disruptive, leveraging process and technology enablers to enhance automation, efficiency, and scalability. It can include both prefabricated and modular construction, integrating advanced technologies and mass production methods.
- Modular construction: Takes prefabrication a step further by creating entire sections, or modules, in a controlled off-site environment. These modules, which can include interior finishes and installed systems, are then transported to the final location and assembled into a complete structure.
In short, while prefabricated and modular construction focus on where and how building components are manufactured and assembled, industrialized construction takes a broader approach: It prioritizes efficiency, automation, and standardization by integrating advanced technologies and streamlined industrial processes to optimize the entire construction workflow.
A look back: How prefabricated construction has evolved over time
Prefabricated construction might seem like a modern trend, but its roots go back thousands of years. As early as 2600 BCE, the Egyptians used pre-cut stone blocks to construct the pyramids, allowing for more efficient building processes. The Romans later advanced this concept by incorporating prefabricated architectural elements such as columns, arches, and domes, which helped them construct massive structures more quickly and consistently.
In the 20th century, prefabrication became a game-changer, especially after World War II. With millions of people needing housing, factory-made building components—like entire wall panels, floors, and roofs—were mass-produced and transported to construction sites for rapid assembly. This approach significantly reduced construction time and costs, making prefabrication a key solution for post-war rebuilding efforts.
For a bit more context, it’s interesting to note that prefab building and modular construction have taken a step back in recent years. However, the prefabricated construction market was valued at US$146.4Bn in 2024 and is expected to reach US$208.1Bn by 2030.
This market is growing rapidly, driven by urbanization, cost efficiency, and the demand for scalable infrastructure, especially in emerging economies like India and China. The Asia-Pacific (APAC) region holds a major share, fueled by construction activity, labor shortages, and government support for affordable housing. Europe and North America are also expanding, with prefabricated construction gaining traction in commercial and residential sectors.
➡ You may be interested: The main trends in the construction world for 2025
Benefits of prefabrication in construction
Speed of construction & cost-efficiency
Prefabrication is often faster than traditional construction because the components arrive pre-built and only need to be assembled on-site. It can also be more cost-effective. Since prefabricated components are manufactured in a controlled factory environment, transporting them is often cheaper than moving raw materials and assembling everything on-site.
➡ Prefabrication can reduce construction time by up to 50%!
Building smarter, building greener
Building more sustainably starts with rethinking how we construct. Traditional methods rely on frequent material transport and generate significant waste. In contrast, prefabrication centralizes production in a factory, reducing its environmental impact.
- Lower carbon footprint: Prefabricated construction can cut carbon emissions by up to 40%. Producing components in one location and bulk reduces the need for multiple raw material deliveries and the emissions they generate.
- Efficient energy use: Prefabrication reduces energy consumption by centralizing production in a controlled environment. Unlike traditional construction, which requires energy for on-site machinery, temporary climate control, and frequent material transport, factories optimize energy use through automation, bulk processing, and climate efficiency.
- Key fact: Prefabricated construction consumes up to 67% less energy than traditional methods.
- Less waste: Factory-based prefabrication minimizes waste by using advanced technology to cut materials precisely. Unlike traditional construction, where on-site inefficiencies lead to excess waste, prefab manufacturing improves material use, allowing leftovers to be reused or recycled. This streamlined process makes construction more efficient and sustainable.
Flexibility & scalability
Prefabricated construction has become a versatile choice for a wide range of building projects. Here’s how:
- Design flexibility: Advanced tools like Building Information Modeling (BIM) create a virtual 3D model of project, allowing every detail to be planned. This ensures that components are precisely manufactured in the factory and fit together seamlessly on-site. Did you know? According to COBOD—one of the startups in our investment portfolio specializing in 3D printing—robotic arms play a major role in prefabricated construction. In fact, 13 out of 14 prefabricated projects were completed using some version of a robotic arm.
- Efficient expansion: Adding new sections or expanding existing structures is simpler with prefabrication, as added modules integrate seamlessly with minimal disruption.
- Adaptive project management: Prefabrication enables phased construction, allowing different parts of a project to be completed in stages and adjusted as needed.
Where you’ll find prefab buildings today
- Student Residence, Spain: A new student residence-hotel is under construction in Seville’s Isla de la Cartuja, set to open in summer 2025. The building will feature 496 rooms and leverage advanced prefabrication techniques, particularly in its façades and bathrooms—to improve efficiency and quality.
- Raffles City Chongqing, China: This landmark complex consists of eight skyscrapers linked by a 300-meter-long elevated corridor known as “The Crystal.” Sections of the passage were prefabricated, lifted from the ground, and installed atop four towers, showing the potential of prefabricated construction in large-scale developments.
- Yellow House, Chile: Architect Alejandro Soffia embraces prefabrication to create high-quality structures with minimal environmental impact. His approach starts with a slab panel as a modular unit, which is then used to form volumes, each defined by two slabs and two walls, allowing for flexible room configurations.
How Cemex Ventures is redefining the future of prefab construction
At Cemex Ventures, we bet on technologies and trends that can help solve the challenges in the construction industry. As prefabricated construction continues to gain traction in the built environment and set up itself as a necessary solution for industry professionals, we keep searching for innovations that enable faster, more efficient building while optimizing resources and integrating cutting-edge technologies.
Prefab construction tackles some of the most complex challenges in modern buildings, such as rising housing costs in many cities. This manufacturing method offers an affordable alternative by streamlining production, this method uses less construction materials than traditional approaches, and shortening construction timelines, making it especially valuable for rapid-response housing. More than just a construction technique, prefabrication is a forward-thinking strategy that’s reshaping the future of building across different climates and urban landscapes.
Are you an entrepreneur with a disruptive prefab construction solution that’s redefining the industry’s future? Get in touch with our investment team now.
