Modern Methods of Construction (MMC) – the future of construction in Ireland?

The significant shortage of houses in Ireland has been well publicised in recent years and indeed was one of the driving forces behind the 'Rebuilding Ireland Action Plan for Housing and Homelessness' and the more recent 'Project 2040 National Planning Framework'. The Irish Times reported in April this year that home ownership has fallen among young adults. The report cited a webinar in March this year where the chief executive of Cairn Homes, Michael Stanley, noted that the percentage of home ownership among 25-39 year olds had dropped from 22% in 2011 to 16% in 2016 (according to the official census data) and was now about 12% according to research conducted by Cairn Homes. 

One of the five central aims of the Rebuilding Ireland Action Plan is increasing the housing supply. The plan undertook to deliver 25,000 homes per year over 6 years; 150,000 houses by the end of 2022. This target is in stark contrast with the statistics; at April this year, housing supply is 83,913. Clearly, productivity in the housing sector needs to increase in order to bridge the gap between the supply and demand and to meet the requirements of government housing initiatives. Perhaps a contributing factor to the significant deficit are the limitations and challenges of traditional construction methods. Can Modern Methods of Construction (MMC) play a role? 

What is MMC?

First, what do we mean by MMC? The definition published in the UK by the Ministry for Housing Communities and Local Government is a useful guideline. It identified seven categories of MMC: 

  • volumetric modular
  • structural panellised
  • off-site components
  • additive manufacture
  • non-structural assembles and sub-assembles;
  • off-site building material improvements
  • on-site process improvement

Effectively, MMC describes an approach to constructing buildings more quickly, reliably and sustainably by methods such as off-site manufacturing, modular construction panels with timber or light steel framing, structural insulated panels or cross-laminated timber. 

Benefits of MMC 

Time

MMC saves a significant amount of programme time as construction of modular units can take place off-site in conjunction with the on-site/structural construction. Also as the majority of the construction work is carried out off-site and indoors, external factors such as inclement weather do not delay construction. Process production and repetition of process can also increase productivity, create efficiencies and reduce labour hours. 

In addition, as COVID-19 continues to affect and influence the construction industry, MMC offers a better controlled environment to ensure developers and contractors can adhere to the social distancing guidelines and minimise the risk of delay or site closure due to on-site incidents of COVID-19. 

Sustainability

Sustainability is particularly important given public awareness and focus on the climate crisis. Investors are progressively concentrating on sustainability as a key metric in the performance of their portfolio. Lenders are also increasingly viewing it as an important performance indicator for borrowers to achieve. 

Some of the advantages of MMC in terms of sustainability include: 

  • minimising wastage through mass production and repeat processes; a study by KLH Sustainability indicated that modular construction results in over 45% reduction in material use and over 50% reduction in waste generation
  • modular units can also be disassembled and re-used which reduces the demand for raw materials and promotes recycling e.g. materials used in panelised and volumetric modular systems can be more readily reused in comparison to the materials used in traditional construction such as brick and concrete
  • off-site manufacturing minimises pollution and disruption on-site
  • labour is generally located in close proximity to the relevant manufacturing site or factory, which minimises the need to commute to work and therefore reduces traffic and carbon footprint
  • products can be tested and improved more regularly which significantly increases product improvements including sustainability and energy efficiency

MMC in Irish construction industry 

If the Irish industry is to meet the challenging targets outlined in government housing initiatives and the increasing demand for high quality and affordable housing, MMC could be an attractive option. The adoption of MMC may also be an effective way for developers to meet the sustainability metrics that funders and investors are increasingly seeking. 

In general, the Irish construction industry has been relatively slow to adopt MMC. A reason for this may be that most construction firms in Ireland are SME's and would need significant support to utilise and implement MMC, particularly given the associated costs and labour shortages (which has been intensified by the COVID-19 pandemic). However, conversely the COVID-19 pandemic has the potential to accelerate the modernisation of the construction industry. Although the delays caused by COVID-19 reduced productivity, the industry may experience an increase in the use of MMC to regain momentum and programme certainty and ultimately mitigate any future delays. 

From a legal perspective, MMC introduces a number of interesting contractual considerations such as: ownership of off-site material, insurances and transit risk, insolvency risk of suppliers, defects in modular units (and liability) and regulatory compliance (e.g. building regulations). It will be interesting to see how such considerations evolve and manifest in development agreements and other construction contracts in respect of future MMC projects in Ireland. 

For further information on this topic, or to discuss any matter raised in this article, please contact Siobhan Kearney, associate, Conor Owens, partner, or any member of the Construction & Engineering team.

Date published: 24 May 2021