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As international modular manufacturers expand across multiple markets, Australian businesses face a commercial challenge centred less on capability than on achieving consistent production scale.
Recent reports highlighting the international expansion of Chinese modular manufacturers such as CIMC have inevitably prompted questions about Australia’s place in an increasingly global volumetric construction market. (main image: The 17-storey ibis Styles East Perth hotel comprises 171 steel volumetric modules delivering 252 guest rooms, with CIMC providing module supply, transportation and project financing.)
The discussion is often framed as a choice between manufacturing locally or importing completed modules. However, that may overlook the more fundamental issue.
The real challenge could be scale.
Like most advanced manufacturing industries, volumetric construction depends on maintaining consistent production. Factory investment, automation, procurement systems and skilled workforces all rely on high levels of utilisation to remain commercially competitive. Periods of idle production can quickly erode margins, regardless of the quality of the finished product.
Australia presents unique challenges in this regard. Demand is spread across multiple states, building regulations vary between jurisdictions, and many projects are relatively modest in scale. While the sector has delivered numerous successful projects, maintaining continuous factory throughput remains an ongoing commercial challenge for many manufacturers.
By comparison, large international producers are increasingly supplying multiple markets simultaneously. Hotels, student accommodation, worker housing, healthcare facilities and data centres are being manufactured for projects across several countries, allowing factories to operate at substantially higher volumes and spread fixed costs across greater output.
Different pathways to achieving scale
This does not necessarily place Australia’s manufacturing base at a disadvantage.
Local volumetric manufacturers continue to offer significant advantages, particularly where projects require close collaboration with clients, customised design, shorter transport distances, rapid response and a detailed understanding of Australian regulatory requirements. These strengths remain difficult to replicate from offshore.
Instead, the emergence of larger international manufacturers may encourage Australian businesses to consider different pathways to achieving commercial scale.
Some may continue investing in domestic manufacturing as project pipelines mature and market adoption increases. Others may specialise in higher-value sectors where technical capability, customisation and proximity outweigh production volume. Some may pursue export opportunities, while others may establish partnerships with offshore manufacturers or adopt modular integration models that combine Australian engineering, compliance and project delivery with international manufacturing capacity.
In many respects, this reflects developments seen across other advanced manufacturing industries. Global supply chains have not eliminated local capability; they have encouraged businesses to specialise in areas where they can create the greatest value while collaborating across international production networks.
The same evolution may now be occurring within volumetric construction.
Rather than asking whether Australia should manufacture modules locally or source them internationally, the more useful question may be how Australian businesses can remain competitive as global production capacity continues to expand.
Ultimately, Australia’s volumetric construction industry is unlikely to be defined by a single business model. Local manufacturing will remain critical for many projects, while international partnerships and global supply chains are likely to become increasingly important for others.
The common denominator is scale. Whether achieved through domestic production, export markets, strategic partnerships or new delivery models, the businesses best positioned for long-term success are likely to be those that can maintain consistent factory utilisation while continuing to deliver quality, certainty and value to their clients.
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