The Global Building Insulation Materials Market is estimated to be USD 26,170 million in 2020, and it is expected to reach USD 32,790 million by 2026, registering a CAGR of over 3.9% during the forecast period.
The market was negatively impacted due to COVID-19. Owing to pandemic scenario, many insulating material manufacturing companies and raw material manufacturers extended the closure of all their operations at their manufacturing locations till receipt of further directions from government authorities. The COVID-19 pandemic had an adverse effect on the global economy, which included disruptions in the supply chain. Supply of many components from China were delayed, resulting in insulation materials’ end-user industries, globally, running out of components to assemble. The supply chain is opening again now, but it is taking some time to fill. Thus, there are shortages of many items in the market. Lead times doubled, and the shortage was compounded by the shortage of air and ocean freight options to move products to and from manufacturing countries. Also, China’s dominant role as the raw material supplier means that any major disruption can put global supply chains at risk.
- Over the medium term, the factors driving the growth of the market studied are the growing demand for energy efficiency, and rising infrastructure and industrialization in Asia-Pacific.
- On the flip side, harmful effects as a result of exposure to certain high-temperature insulation materials and unfavorable conditions arising due to the impact of COVID-19.
- The residential industry is expected to dominate the building insulation materials market over the forecast period.
- Europe dominated the building insulation materials market and Asia-Pacific is forecasted to be the fastest-growing market during the forecast period owing to the increasing consumption for countries such as China and India.
Key Market Trends
Residential Sector to Dominate the Market
- Insulation of residential buildings is gaining popularity due to its architectural and energy efficiency benefits. Promoting energy efficiency (EE) requirements for new residential buildings has been proven an effective mandatory policy instrument to slow down the increase of energy consumption in the residential building sector.
- Residential construction across the globe has been witnessing significant growth over the past few years owing to factors like population growth, migration from rural areas to service sector clusters, and the growing trend of nuclear families. Besides, decreasing land-to-population ratio and the growing trend of constructing high-rise residential buildings and townships have been driving the application of building insulation materials in the residential construction segment across the globe.
- In the recent past, the highest growth rate regarding residential construction was expected to be registered in the Asia-Pacific region, owing to the expanding housing construction markets in China and India. Asia-Pacific has the largest low-cost housing construction segment, led by China, India, and various Southeast Asian countries. However, with most of the Asia-Pacific countries being severely affected by COVID-19, the growth is expected to notably slower down in the short run.
- Globally, there has been a significant undersupply to meet the demand for housing. This presented a major opportunity for the investors and developers to embrace alternative methods of construction and new partnerships, in order to bring forward development. For instance, China, residential investment grew by about 13.9% during the first eleven months of 2019, reaching CNY 9,707.1 billion. The area under residential construction during the period was recorded to have reached 6,276.73 million square meters, indicating a 10.1% growth.
- In Europe, Germany, which leads the construction sector in the region, is embarking on a new era of high-rise living. Germany has the largest construction industry in Europe. The construction sector in Germany accounts for nearly 3.3% of the GDP. According to Statistisches Bundesamt (Destatis), the construction of new dwellings increased to 327.26 thousand in 2020 compared to 317.82 thousand in 2019, which is expected to boost the construction industry. Additionally, more than 50 projects are under construction or in the planning phase, at the time. Cities, such as Berlin, Munich, Stuttgart, Frankfurt, Düsseldorf, Cologne, and Hamburg, have driven the construction market of high-rise residential buildings.
- While residential construction growth was prominent through 2019 in regions, such as Asia-Pacific, North America, and the Middle East, the COVID-19 pandemic severely hit the residential construction growth in the early 2020. However, COVID-19 has been severely increasing the fatality rate across the world and housing and new residential construction are likely to be moderate during the foreseeable future.
- The abovementioned factors are likely to affect the demand for building insulation in the residential construction sector during the forecast period.
Germany to Dominate the European Market
- The German economy is the largest in Europe and the fifth-largest in the world. In 2019, it grew by about 0.6%, the weakest growth rate in the last six years. More substantial private consumption, higher state spending, and booming construction helped support growth in 2019, as struggling manufacturers dragged on activity.According to the IMF, in 2020, the country recorded a decline in GDP growth of about -4.8% due to COVID-19. However, the GDP is expected to increase to 3.6% in 2021, subject to the post-pandemic global economic recovery.
- Germany has the largest construction industry in Europe. The construction industry in the country is growing at a slow pace, majorly driven by the increasing number of new residential construction activities.
- The non-residential and commercial buildings in the country are expected to witness significant growth prospects during the forecast period. The growth is likely to be supported by lower interest rates, increased real disposable incomes, and numerous investments by the European Union and the German government.
- According to the Statistisches Bundesamt (Destatis), the construction of new dwellings increased to 327.26 thousand in 2020, compared to 317.82 thousand in 2019. The construction industry registered significant growth in the country despite the severe impact of the pandemic.
- Also, the stock of new dwellings in residential and non-residential buildings amounted to 42.8 million by the end of 2020, rising by 0.7% compared to the previous year. When compared to 2010, the stock has increased by 5.7% or 2.3 million dwellings.
- Furthermore, according to Federal Statistical Office (Destatis), in May 2021, the construction of a total of 32,384 dwellings was permitted in Germany, which was an increase of 8.7 % compared with April 2021.
- Moreover, millions of immigrants may arrive in Germany in the coming years and may require thousands of new dwellings. The German government announced around 1.5 million new apartments by 2021 (a delay is expected due to the COVID-19 situation).
- However, the German economy is estimated to be severely affected by the pandemic due to expected production halts and decreasing investments, owing to the ongoing lockdown situation. The market in the country is expected to recover only after the country shows positive economic growth.
- Overall, the demand for building insulation materials in Germany, is expected to be moderate for a short term, which is expected to recover during the forecast period.
The global building insulation materials market is fragmented in nature, with no player occupying a significant position in the market. Still, the top four-five players in the market enjoy a considerable share in the global market. The major companies of the market studied include BASF SE, Saint-Gobain, Rockwool International A/S, Knauf Gips KG, and Owens Corning, among others.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
1.2 Scope of the Study
4.1.1 Growing Demand for Energy Efficiency
4.1.2 Rising Infrastructure and Industrialization in Asia-Pacific
4.2.1 Harmful Effects as a Result of Exposure to Certain High-temperature Insulation Materials
4.2.2 Unfavorable Conditions Arising due to the Impact of COVID-19
4.3 Industry Value Chain Analysis
4.4 Porter’s Five Forces Analysis
4.4.1 Bargaining Power of Suppliers
4.4.2 Bargaining Power of Consumers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitute Products and Services
4.4.5 Degree of Competition
5.1.2 Mineral Wool
5.1.4 Polyurethane/ Polyisocyanurate (PUR/PIR) Foam
5.1.6 Other Insulation Materials
5.2 End-user Industry
126.96.36.199 Other Non-residential Industries (Civic, Religious Buildings, etc.)
188.8.131.52 South Korea
184.108.40.206 Rest of Asia-Pacific
5.3.2 North America
220.127.116.11 United States
18.104.22.168 United Kingdom
22.214.171.124 Rest of Europe
5.3.4 South America
126.96.36.199 Rest of South America
5.3.5 Middle-East and Africa
188.8.131.52 Saudi Arabia
184.108.40.206 South Africa
220.127.116.11 Rest of Middle-East and Africa
6.2 Market Share(%)/Ranking Analysis**
6.3 Strategies Adopted by Leading Players
6.4 Company Profiles
6.4.1 Atlas Roofing Corporation
6.4.2 BASF SE
6.4.3 Beijing New Building Material (Group) Co., Ltd.
6.4.6 Huntsman International LLC
6.4.7 Johns Manville
6.4.8 Kingspan Group
6.4.9 Knauf Gips KG
6.4.10 Owens Corning (including Paroc Group)
6.4.11 ROCKWOOL International A/S
6.4.13 Synthos S.A
A selection of companies mentioned in this report includes:
- Atlas Roofing Corporation
- BASF SE
- Beijing New Building Material (Group) Co., Ltd.
- Huntsman International LLC
- Johns Manville
- Kingspan Group
- Knauf Gips KG
- Owens Corning (including Paroc Group)
- ROCKWOOL International A/S
- Synthos S.A
Building Insulation Materials Market - Growth, Trends, COVID-19 Impact, and Forecast (2021 - 2026)