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Market Trends: U.S. Construction Chemicals Demand to Reach $7.5 Billion in 2008

October 1, 2005
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Demand for construction chemicals used in on-site applications in the United States is projected to increase 5% per year to $7.5 billion in 2008, essentially in line with average growth over the last decade. However, this steady growth masks significant changes in specific market segments. Slowing demand in residential building will be offset by a significant rebound in nonresidential construction, specifically the industrial and commercial markets. Fastest growth is expected in cement additives, sprayed polyurethane foam (SPF) and caulks, although opportunities exist in nearly all products based on improvements in materials technology.

These and other trends are presented in Construction Chemicals, a new study from The Freedonia Group Inc., a Cleveland-based industrial market research firm.



Protective coatings and sealers will remain the largest product type, but are expected to register gains slightly below average due primarily to market maturity and slowing price increases. Coatings will register stronger growth than in the 1998-2003 period, supported by a strong upswing in nonresidential building construction, the largest outlet for coatings. The nonresidential building segment is very important for most construction chemicals in general, but especially so for protective coatings and sealers due to the harsh environments of industrial facilities and commercial settings.

The market for caulks and adhesives, the second largest product type, is also relatively mature, although a shift toward higher value, better performing, and more environmentally favorable products will help caulks keep pace with overall construction spending growth.

Cement additives and SPF are expected to continue to lead construction chemical gains. These products constitute a growing niche in the construction chemical market, as increasing numbers of contractors and builders avail themselves of the many advantages offered by these developing technologies. Concrete is being used more often in building design, even in residential building, where concrete has traditionally been limited to foundations and driveways. The use of SPF will continue to grow as developments have simplified the application process. Emerging environmental regulations could restrain SPF gains somewhat, however, if they make product pricing uncompetitive.

For more information, contact Corinne Gangloff, The Freedonia Group Inc., 767 Beta Drive, Cleveland, OH 44143-2326; phone (440) 684-9600; fax (440) 646-0484; e-mailpr@freedoniagroup.com; or visit www.freedoniagroup.com.

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