The market for insulated concrete form (ICF) is expected to grow at a CAGR of around 5%. The factors driving the growth of the market studied are the demand for energy-efficient buildings, increasing construction of high-rise buildings, increasing preparedness toward disasters, and reduced construction time.
- On the flip side, other than the impact of COVID-19 pandemic on the construction industry’s growth, initial high-cost associations and problems during the stage of construction, will hinder the growth of the market studied.
- Increasing promotion and awareness of ICF among both manufacturers and consumers is likely to act as an opportunity for the market growth in the future.
- North America accounted for the highest market share in the ICF market globally and is likely to dominate the market during the forecast period.
Key Market Trends
Residential Segment to Dominate the Market
- The increasing number of building codes that demand energy efficiency has led to a rise in the number of ICF constructions in the residential sector.
- For instance, the new energy code in Canada demands continuous below-grade insulations in residential structures.
- The availability of ICF forms at a cheaper rate (as compared to other alternatives), which provide similar efficiency, is driving the demand in the residential segment, especially in Canada and the United States.
- According to distributors and installers in the two major markets - the United States and Canada - the vast majority of ICF home constructions are skewed toward high-end custom homes, and the demand is still being driven by homeowners, in terms of the number of projects.
- Multi-family homes attribute to the largest market growth in the residential sector. Furthermore, basement construction still makes up a significant portion of ICF residential construction works.
- In China, the construction industry grew at a strong pace in 2019, even though the growth slowed down during the year as compared to 2018.
- The Indian government has been actively boosting housing construction, as it aims to provide homes to about 1.3 billion people. The country is likely to witness ~USD 1.3 trillion of investment in the housing sector over the next seven years, and it is likely to witness the construction of 60 million new homes in the country. The availability of affordable housing in the country is expected to rise by around 70% by 2024.
- In Canada, residential construction witnessed a significant growth rate of 11.02% in 2018, and the growth continued in 2019, majorly driven by government initiatives and the rising immigration in the country.
- In Germany, construction companies are benefiting from the soaring demand for real estate and increased investments in buildings. The upswing in construction has been encouraged by the European Central Bank’s ultra-low interest rates, a growing urban population, and high immigration. The German government made an announcement regarding its plan to construct around 1.5 million housing units by 2021. The overhang of pending residential building permits increased to more than 400,000, suggesting the growth of the sector.
- With the growing awareness and promotional campaigns held by various ICF organizations, the market for ICF in the residential sector is expected to grow over the forecast period.
- However, the slowing down of construction activities due to the economic slowdown and lockdown due to the COVID-19 outbreak are expected to have a negative impact on the growth of the residential industry in the short-/mid-term, and thereby, have an adverse effect on the global insulated concrete form market.
China to Dominate the Asia-Pacific Market
- In Asia-Pacific, China is the largest economy, in terms of GDP. The country witnessed about 6.1% growth in its GDP during 2019, even after the trade disturbance caused due to its trade war with the United States. The economic growth rate of China in 2020 was initially expected to be moderate as compared to the previous year. However, due the onset of COVID-19, the economic growth of China now seems to be contracting by a considerable extent. Many manufacturing and associated activities have already taken a hit in the 2020, and the economic situation is expected to remain dire, if the manufacturing activities are not set back on track by mid-2020.
- In order to contain the growing greenhouse gas predicaments in the country’s major cities, the country’s national climate commitment calls for 50% of all new buildings constructed by 2020 to be certified as green buildings, while its 13th five-year plan prioritizes building efficiency. Following these commitments, the country’s green building sector is expected to increase from 5% to 28% by 2030, representing a USD 12.9 trillion investment opportunity. This provides a lucrative opportunity for the ICF market, where it is still in the nascent stage (primarily due to the lack of customer awareness).
- The construction industry grew at a strong pace in 2019, even though the growth slowed down during the year as compared to 2018. The construction sector has supported the economic growth in the country, while the US-China trade war affected the performance in other industries, such as automotive, electronics, etc.
- Such increase in the number of infrastructure project approvals during 2019 may stimulate infrastructure spending over the next two years.
- The government more than doubled the investment on large-scale infrastructure projects approved during 2019 as compared to CNY 374.3 billion in 2018 (USD 52.8 billion) in order to ensure the steady growth of the economy. Within the first nine months of 2019, the National Development and Reform Commission (NDRC) approved about 21 projects worth more than CNY 764.3 billion (USD 107.8 billion), which accelerated the infrastructure investment by 4.5%.
- In 2020, the country has plans to rely on state infrastructure spending to avert the anticipated scenario of sharper slowdown. In this regard, the country aims to boost infrastructure investment and offer more special bonds.
- The local governments in the country are permitted to issue special bonds worth around CNY 3 trillion (USD 426.20 billion) in 2020, for funding infrastructure projects, including CNY 1 trillion, which is front-loaded to this year. Further, the Central Bank is likely to ease its policy to lower the corporate funding costs and encourage lending.
- Hence, all such aforementioned trends are projected to collectively influence the consumption of insulated concrete form (ICF) in the country over the forecast period.
The global insulated concrete form market is consolidated in nature, with few major companies holding a significant share in the market. The major companies in the market include RPM International Inc., Airlite Plastics Company & Fox Blocks, Amvic Inc., Logix Build Solutions Ltd, and BuildBlock Building Systems LLC, among others.
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