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.