The fiber cement market was valued at 33,346.93 kilo tons in 2021 and the market is projected to register a CAGR of 4.23% during the forecast period (2022-2027).
The market was negatively impacted by COVID-19 in 2020. The construction industry was severely impacted, owning to the lockdown situation, thus, negatively impacting the demand for fiber cement. The residential sector majorly witnessed a negative decline during that specific period. For instance, according to JLL India, in India, the housing sales in the top seven cities in the country decreased from 143,923 in 2019 to 74,451 in 2020, thereby negatively affecting the market studied. However, the industry post-2020 started recovering and is expected to register steady growth through the upcoming period.
- Over the short term, the major factor driving the market studied are rising residential construction across the world, coupled with various advantages offered by fiber cement. However, the presence of alternatives is expected to hinder the growth of the market studied.
- The sliding segment dominated the market in 2021. However, molding and trimming segment is expected to generate the fastest growth though the forecast period.
- Fiber cement penetration in timber frame segment in Europe and replacement of low-end plywood segment with fiber cement in India are likely to act as an opportunities in the future.
Key Market Trends
Increasing Demand from Residential Sector
- Fiber cement products are used in the residential industry for both external and internal applications. They are used for internal claddings, which include partition walls, windowsills, ceilings and floors, and tile backer boards.
- They are used for external claddings, which include flat sheets as base, flat sheets for wind shields, wall copings, soffits, corrugated sheets, slates, and planks. They are also used for roofing as slates and corrugated sheets.
- Residential construction in regions, such as North America, Asia-Pacific, and Europe, has been witnessing a steady growth in recent times. In Asia-Pacific, residential construction is increasing in countries, including India, China, Indonesia, Singapore, and Vietnam, among others. Whereas, North America and Europe are witnessing growth in residential construction, widely driven by a high demand for residential houses.
- The construction sector in the Asia-Pacific region is the largest in the world and is increasing at a healthy rate, owing to the rising population, increase in middle-class income, and urbanization.
- China is majorly driven by ample developments in the residential and commercial construction sectors, supported by the growing economy. In China, the housing authorities of Hong Kong launched several measures to push-start the construction of low-cost housing. The officials aim to provide 301,000 public housing units by 2030.
- Furthermore, India is likely to witness an investment of around USD 1.3 trillion in housing, over the next seven years, during which, it is likely to witness the construction of 60 million new homes. The rate of availability of affordable housing is expected to rise by around 70%, in 2024 in the country. The Indian government's 'Housing for All by 2022' is also a major game-changer for the industry. This initiative aims to build more than 20 million affordable homes for the urban poor by the end of 2022. This will provide a significant boost to housing construction. This is expected to provide various opportunities for the growth of the fiber cement market in the country in the coming years.
- Germany has the largest construction industry in Europe. The construction industry in the country has been growing at a slow pace, majorly driven by increasing residential construction activities. Furthermore, according to the Federal Statistical Office (Destatis), in May 2021, the construction of total 32,384 dwellings was permitted in Germany, witnessing an increase of 8.7 % compared to April 2021.
- In the United Kingdom, the new orders for construction grew by 12.2%, which were around GBP 1,227 million in Q1 2021 compared to the fourth quarter of the previous year.
- In the United States, the national numbers show an undeniable boom in the new residential constructions. Over the past two years, permits issued increased 36% nationally for all-sized residential projects. For single-family homes, the increase was by 30%. For large buildings containing five or more units, the increase was 21%. Also, during this period, the average value of a newly constructed single-family home increased by 7%.
- In South America, according to the Brazilian Chamber of Construction Industry (CBIC), the Brazilian new-build market experienced a very busy first half of 2021. In the first half of 2021, new apartment sales went up by 46.1% in annual terms. Furthermore, the launch of new developments also rose sharply. In the second quarter of 2021, they went up by 51.3% compared to the first quarter of 2021.
- All such growth depicting factors in the residential construction sectors are likely to drive the demand for fiber cement, during the forecast period.
Asia-Pacific Region to Dominate the Market
- Asia-Pacific accounted for the largest market for fiber cement market owing to rapid development in the construction sector across China, India, and ASEAN Countries.
- In China, according to the National Bureau of Statistics of China, the construction output value in the country increased from CNY 9.6 trillion in 2010 to CNY 26.39 trillion in 2020. The country has been majorly driven by the ample developments in the residential and commercial construction sectors and supported by the growing economy. In China, the housing authorities of Hong Kong launched several measures to push-start the construction of low-cost housing. The officials aim to provide 301,000 public housing units by 2030.
- In India, various policies implemented by the Indian government, such as the Smart City project, Housing for All by 2022, etc., are expected to bring the needed impetus to the slowing construction industry. Moreover, recent policy reforms, such as the Real Estate Act, GST, REITs, etc., are expected to reduce approval delays and strengthen the construction sector over the next few years.
- Indonesia is drafting ambitious plans for more than USD 400 billion in building projects, from constructing 25 airports to new power plants in the forecast period. Recently in September 2020, Mitsubishi Corp., along with Temasek Holding, is planning to build a smart city 25 km southwest of Jakarta. The smart city will include homes, shopping centers, and medical facilities, with the goal of housing 40,000 to 60,000 permanent residents.
- These factors are estimated to boost the demand for fiber cement in the Asia-Pacific region during the forecast period.
The global fiber cement market is partially fragmented in nature. Some of the major players in the market include James Hardie Building Products Inc., Etex Group, NICHIHA Co. Ltd, SCG, and Elementia Materiales, among others.
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