The market for Europe Roofing Tiles is expected to grow at a CAGR of over 6% during the forecast period. Major factors driving the market studied are increasing demand from construction industry and growing favorable government policies for green buildings. On the flipside, unfavourable conditions arising due to COVID-19 outbreak is the major restraints, which is expected to hinder the growth of market.
- Development of solar roof tiles is expected to offer various lucrative opportunities for the growth of market.
- In terms of the end-user industry, residential sector is expected to account for the largest share.
- Based on country, Germany is expected to dominate the regional market due to growth in the construction industry.
Key Market Trends
Consistent Growth of Residential Sector
- The increasing middle-class population, coupled with their increasing disposable incomes, has facilitated the expansion in the middle-class housing segment. This factor is likely to increase the usage of roofing tiles during the forecast period.
- The usage of roofing tiles for residential applications can reduce the overall heat transfer into the attic space by almost 70%, as compared to an asphalt shingle roof. Roofing tiles are available for various types of residences, including single family homes, townhomes, condominiums, and apartment buildings. The installation of roofing tiles in residential applications is one of the most cost-effective choices, due to their long lifespan.
- The EU construction sector's output grew by 3.4% Y-o-Y in the third quarter of 2019, as compared to 4.6% and 6.4% in Q1 and Q2, respectively. Growth was particularly pronounced in Hungary, the Netherlands, Poland, and Spain. Gross fixed investment in construction grew in real terms in Q3 2019, by 3.7% Y-o-Y and 0.5% on-quarter.
- In some countries, improving real wages and cheap mortgage financing may continue to stimulate demand for residential housing. In other EU countries, demand is expected to weaken considerably in 2020, as the residential construction cycle already peaked in 2017. The persisting labor shortage in the construction sector in many EU countries is halting the completion of construction projects.
- Germany has the largest construction industry in Europe. The residential construction segment is expected to have a moderately high growth. According to industry experts, the recent positive migration to the country is stimulating the demand for new residential construction. Around 3.6 million migrants are expected to arrive in Germany by 2020, requiring at least 350,000 new dwellings per year, which is expected to boost the construction sector.
- In March 2020, developers received 23.5% more building permits than in the same period last year. More apartments were completed (+17 %) than in March 2019. In the case of investments carried out by individuals, a decrease was noted in each category. The highest Y-o-Y decline (-24.9 %) was recorded among the newly launched residential developments.
- Owing to all the above-mentioned factors for roofing tiles in Europe, its market is expected to grow rapidly over the forecast period.
Germany to Dominate the Market
- The German economy is the largest in Europe, and the fifth-largest in the world. In 2019, the German economy grew by about 0.6%, which had been its weakest growth rate in the last five years. The economic growth of the country is affected by various factors, such as trade tensions leading to reduced exports and recent government policies on debts and fiscal adjustments. The country plans to stop further downfall of the economy due to the impact of COVID-19, by announcing availability funds (of over USD 600 billion), in order to ensure growth and smooth functioning in various public sectors in future. However, the GDP of the country is expected to further drop down to -7.0% in 2020.
- Germany has been one of the moderately hit countries in the world by the COVID-19 outbreak. In response to the outbreak, the German government announced several containment measures, including the closing down of non-essential businesses, in order to slow the spread of the virus across the country. However, the German government has exempted infrastructure, residential, and utilities construction from the lockdown measures, with construction being allowed to continue through the COVID-19 crisis.
- The country is aiming to keep construction sites open, as the industry is considered as the essential pillar of the domestic economy that needs to be maintained. According to the Minister of Transport and Digital Infrastructure, Andreas Scheuer, construction works should be continued in the country to help the economy recover once the COVID-19 outbreak ends.
- 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, increase in real disposable incomes, and numerous investments by the European Union and the German government.
- In February 2020, the building permits awarded stood at 24,318, a slight decrease compared to December 2019, i.e., 41,046 units, which has negatively impacted the construction market. This trend is expected to slightly change, owing to the rising demand for real estate, increasing population, increased job security, and low borrowing costs.
- Overall, all such factors are expected to drive the construction industry in the country, which, in turn, may drive the roofing tiles market through the forecast period.
The Roofing Tiles market in Europe is consolidated, with the top five players accounting for major share of the market. The key players in the market include Wienerberger AG, BMI Group, Etex Group, IKO Industries Ltd., and Crown Roof Tiles.
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