U.S. construction chemicals demand to reach $6.4 billion in 2006

Demand for construction chemicals used in on-site applications is projected to increase 4.6% per year to $6.4 billion in 2006, including price increases. Although overall construction-spending growth is expected to decelerate compared with the previous five-year period, chemical demand is forecast to grow more rapidly due in large part to a recovery in industrial construction, which is by far the most chemical-intensive segment of the construction market.

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 below-average growth due primarily to market maturity; however, coatings will register stronger growth than in the previous five-year period. Cement and asphalt additives are expected to register the strongest gains. These products constitute a growing niche in the construction chemicals market, as increasing numbers of contractors and builders avail themselves of the many advantages offered by cement and asphalt additives. This is in contrast with many other construction chemical products, which have essentially reached market maturity. Caulks and adhesives are also expected to register above-average growth. Market value growth for caulks in particular is expected to benefit from a shift to better performing formulations, including silicone caulks.

Nonresidential building construction will remain the largest market for construction chemicals, accounting for nearly 45% of overall demand in 2006, and will also offer the strongest growth opportunities. While growth in the commercial and institutional segments of the nonresidential market is expected to decelerate, industrial construction is forecast to undergo a dramatic turnaround from recent years, largely as a result of facility modernization efforts. Growth for construction chemicals used in repairs and improvements is expected to be faster than for those used in new construction. In the residential market, repair and improvement spending is expected to pick up compared with the previous five-year period.

Construction Chemicals is available for $3,800 from The Freedonia Group Inc., 767 Beta Drive, Cleveland, OH 44143-2326. For more information, contact Corinne Gangloff, phone (440) 684-9600; fax (440) 646-0484; e-mail pr@freedoniagroup.com ; or visit http://www.freedoniagroup.com .