US demand to rise over 7% annually through 2015
US demand for nonresidential prefabricated building systems is projected to increase over seven percent annually to $16 billion in 2015. Growth will derive from a recovery in nonresidential construction activity, particularly in the office and commercial segment, from a weak 2010 base. In addition, improved prefabricated building system design will provide opportunities for increased market penetration. Prices for many of the raw materials used in nonresidential prefabricated structures increased sharply between 2005 and 2010. Going forward raw material price growth is expected to moderate which will restrain value gains in the nonresidential prefabricated structures market.
Shipments of nonresidential prefabricated building systems are expected to increase 6.3 percent annually to $16.3 billion in 2015, trailing increases in demand slightly. The US is a net exporter of prefabricated building systems, but the high 2010 trade surplus in these products will decrease through 2015. In 2010, the weak domestic market led to a decline in imports, while exports were boosted by infrastructure development in the coal sands areas in Canada and the troop surge in Afghanistan.
Metal building systems to remain largest segment
Prefabricated metal building systems will remain the largest segment of the market, accounting for more than 45 percent of the total. Through 2015, demand for metal building systems will increase about six percent annually. Demand will be supported by increases in many metal building markets, particularly in office and commercial markets and many industrial segments. However, the expected decline in metals prices will offset some of these gains.
Demand for nonmetal prefabricated building systems (modular, precast concrete, autoclaved aerated concrete and fabric) is expected to increase more than eight percent annually to $8.4 billion in 2015, outpacing growth in metal building systems. The modular building segment is expected to see the fastest growth, benefiting from strong growth in commercial construction and gains in the school age population, which will bolster demand for modular classrooms. Panelized precast concrete systems will also increase at an above-average pace, supported by the design flexibility, sound attenuation properties and low maintenance requirements of these systems.
Office, commerical markets to grow at double digit rates
Prefabricated building systems are used in a wide range of nonresidential applications, most commonly low-rise structures in the industrial, office, commercial and institutional markets. The office and commercial markets will grow at double digit annual rates through 2015, supported by strong growth in related building activity and by improved designs for prefabricated systems.
South, West to see strongest regional market gains
On a regional basis, the South and West are forecast to experience the strongest gains in nonresidential prefabricated building demand. Gains will be supported by relatively strong nonresidential construction activity, as well as from above-average population and economic growth. The South will remain the largest market, accounting for approximately 40 percent of total demand through 2015.
US Nonresidential Prefabricated Building System Demand to Exceed $15 Billion in 2015
Nonresidential prefabricated building system demand in the US is expected to increase 7.8 percent annually to $15.2 billion in 2015, a strong showing compared to the weakness over much of the previous decade. The recovery in office and commercial construction, coupled with continued gains in institutional, industrial and agricultural construction, will provide opportunities. The development of new products and technologies, including more tailored designs, greater cladding options for metal buildings and improved concrete mixes, will also support demand. However, competition from traditional site building will remain intense, and moderating prices for many of the raw materials used in prefabricated building systems will restrain value growth. These and other trends are presented in Nonresidential Prefabricated Building Systems, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.
Metal building systems (including components) have long been the largest segment of the US nonresidential prefabricated building system industry and will remain so for the foreseeable future. While gains are not expected to match the overall prefabricated building system average, demand for metal building systems is expected to post strong 7.2 percent annual gains through 2015.
Among nonmetal building systems, the modular building system segment is expected to see the strongest gains, just ahead of the panelized precast concrete segment. The modular building system market will benefit from robust growth in both commercial and institutional construction activity, as well as from the growing popularity of prefabricated bathroom and kitchen modules. Gains for panelized precast concrete systems will be driven by increases in office and commercial construction, which are among the more popular applications for these systems. In addition, technological improvements, including better reinforcement materials, improved concrete mixtures and greater design options, will support demand.
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