US demand to rise nearly 8% annually through 2018
Demand for construction chemicals used in on-site applications in the US is projected to grow nearly eight percent per year through 2018. Gains will be primarily driven by double-digit increases in building construction expenditures, supported by healthy economic growth and an improved consumer financial outlook. Increased economic activity and greater government investment in the aging US infrastructure will also support healthy consumption of construction chemicals in nonbuilding applications. While overall growth will be underpinned by the strong increases in construction spending, the product mix will also continue to shift as the market adapts to environmental regulations and new, more stringent building codes by turning to new, higher value formulations and technologies.
Jump in new housing construction to drive gains
Following several years of recovery, a fully healed US housing market -- aided in part by healthy economic growth and a much improved consumer financial outlook -- will lead to a jump in new residential construction activity by 2018. Consumer preference for greater numbers of windows, larger kitchens, and for decks will boost consumption of coatings and sealers, grouts and mortars, and caulks and adhesives. Demand for onsite construction chemicals in residential improvement and repair applications will also rise as more financially secure consumers continue to invest in updating and maintaining their homes.
Nonresidential building construction activity is also expected to increase rapidly through 2018. Healthy economic growth will support a rebound in both the industrial and office and commercial sectors, with increased construction of manufacturing plants, warehouses, refineries, hotels, shopping malls, restaurants, and retail stores all helping to drive nonresidential construction chemical demand. Caulks and adhesives will experience some of the fastest growth, as will sprayed polyurethane foams, which will benefit from tightening building codes that require increased energy efficiency.
Greater economic activity will also require increased investment in infrastructure, both public and private, particularly for the US’ aging transportation system. This will lead to healthy growth in nonbuilding construction chemical demand, especially for cement and asphalt additives and coatings. Rising demand for chemical additives and for coatings will also result from the increasing use of new concrete technologies that offer superior performance and ease of placement, such as high-performance concrete and self-consolidating concrete.
Higher value formulations to continue market share gains
Across the entire construction chemicals market, higher value formulations will continue to gain market share in many product segments, due to both environmental and performance issues. This is due in part to volatile organic compound (VOC) regulations enacted at both the federal and state levels. The shift away from solvent-based formulations will be furthered 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 in the US going forward, though the decreased replacement frequency and volume of chemicals required will serve as a check on further growth.