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The global building materials market is expected to grow at a CAGR of 6.76% from 2018 to 2023. Next year, the global market value is predicted to reach a massive $1.1 trillion. It is clear that the global market continues to grow at a comfortable pace, and growth in future years is expected to continue to be a trend.
Role of Sustainability and Environmental Impact
Numerous key drivers of market growth have been identified in recent analyses. Firstly, the world’s population is expanding, and with this growth comes an increased demand for sufficient housing, especially in developing countries.
Next, is the global trend of focussing on sustainability and a growing consciousness of environmental impact, which is influencing all sectors. Consumers, businesses, and clients are all striving to reduce their carbon footprint, and limit their negative impact on the earth; they want to reduce energy consumption and be more environmentally friendly.
This has led to a huge drive in a fairly new segment of the market, the green materials segment. Further to this, increasing investment in infrastructure projects has driven the sector, as have investments in commercial real estate. Finally, advancements in material technology have also encouraged growth.
Key Motivator to Rising Building Material Demand
The key region of interest that is currently propelling the industry is Asia-pacific. Currently, this region is showing the fastest growth rate. Rapid industrialization and business activity in this region are attributed as being the key motivator to rising building material demand.
The US and the Middle East and Africa both present regions of interest for future growth in the market. In the US, 75% of construction firms have claimed that they will be expanding their payrolls in light of improving economic conditions, signaling more construction work may be underway in the coming years.
In the growing market at the moment, the top global players include companies such as CEMEX, China National Building Material Company, HeidelbergCement, LafargeHolcim, Knauf, Saint Gobain, BaoWu, ArcelorMittal, USG and CSR.
As mentioned above, green is currently a key driver of the market. Much growth is being seen in this segment due to increased demand for sustainable buildings, both from clients and because of new government regulations across the globe. This part of the market alone had an estimated worth of around $192.3 billion in 2016 and is growing at a CAGR of around 11.2%.
In this segment, it is North America who is the region driving most growth, with around 35% of the segment share being attributed to them. Asia-pacific will also become a key player in this particular segment as it has shown the fastest growth rate over recent years, expanding at around 12%. Recently, India and China signed an agreement to take action to prevent climate change which should further boost growth in the green materials segment.
Reduction of Carbon Footprint
Numerous factors are influencing this trend and will continue to influence in the foreseeable future. Reduction to carbon footprint has become a key focus of governments and businesses, as the world strives to reverse the damage that has been done to the planet.
In addition, we are becoming increasingly aware that we are running out of fossil fuels, and due to this people are demanding not only products that rely less on fossil fuel usage in their supply chain, but are also looking to construct buildings that rely less on fossil fuels and utilize renewables instead.
Conclusion
With mounting pressures on all industries to be green, the construction sector looks set to continue to enjoy much growth through the establishment of the green construction sector. The trend for new buildings to be cost-saving, environmentally-friendly, and energy-efficient structure is predicted to stay.
Source
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