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SCC, HPC demand help construction chemicals’ five-year outlook

Sources: Freedonia Group, Cleveland; CP staff

U.S. demand for construction chemicals used in on-site applications is projected to grow 8.2 percent per year through 2018 to $12.1 billion. Gains will be primarily driven by double-digit increases in building construction expenditures, owing to healthy economic growth and an improved consumer financial outlook. Increased economic activity and greater government investment in the aging infrastructure will also support construction chemical use in nonbuilding applications.

While overall growth will be underpinned by the strong increases in construction spending, the product mix will also continue to shift toward new, higher value formulations and technologies as the market adapts to environmental regulations and more stringent building codes. These and other trends are presented in Construction Chemicals, a new study from market researcher Freedonia Group.

“Following several years of recovery, a fully healed U.S. housing market will lead to a jump in new residential construction activity,” notes analyst Nick Cunningham. Nonresidential building construction activity is also expected to increase rapidly through 2018, he adds, as economic growth will support a rebound in industrial, office and commercial sectors.

Greater economic activity will also require increased investment in infrastructure, both public and private, particularly for the aging transportation network; this will especially spur demand in two of seven categories detailed in Construction Chemicals: Cement & Asphalt Additives and Coatings. Growing demand for chemical additives and coatings will also result from the increasing use of concrete technologies that offer superior engineering properties and ease of placement, such as high performance concrete and self-consolidating mixes.

Construction Chemicals finds 2013-2018 growth rates for Cement & Asphalt Additives of 11.2 percent, or $1.7 billion to $2.8 billion, and Grouts & Mortars of 11 percent, from $475 million to $800 million. Over the six-year forecast horizon, those categories lag only Sprayed Urethane Foam, which Freedonia analysts see a 12.2 percent annual growth rate during the forecast period.

Across the construction chemicals spectrum, higher value formulations will continue to gain share in many product segments in response to both environmental and performance concerns. Regulations addressing products’ volatile organic compound content have been enacted at both the federal and state level. This trend will be further intensified by consumer preferences for low odor and easy cleanup water-based products. The transition toward better performing, longer lasting products will boost the value of the construction chemicals market going forward, though the decreased replacement frequency and volume of chemicals required will serve as a check on further growth. Orders for Construction Chemicals can be placed and additional information or industry research obtained through www.freedoniagroup.com.