World Consumption of Insulation to Reach 21.5 Billion Square Meters in 2012

Worldwide consumption of thermal and acoustical insulation materials is projected to expand 3.8 percent per year through 2012 to 21.5 billion square meters of R-1 value.  In dollar terms, demand for insulation materials will expand to $37 billion, primarily reflecting gains in volume, coupled with moderating increases in unit prices.  These and other trends, including market share and product segmentation, are presented in World Insulation, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

The most rapid rates of growth will be posted in the developing countries of Asia, boosted by strong building construction activity and increasing production of products which incorporate insulation materials, such as refrigerators and freezers.  In particular, building construction spending continues to expand rapidly in China, sparking very strong annual growth in the value of insulation demand through 2012.  Demand for insulation in China will also benefit from government initiatives to encourage more energy-efficient building construction. 

Slowing residential construction in Western Europe, Canada and Mexico will limit insulation gains in new construction.  However, a rebound in residential construction activity in the United States from a weak 2007 base will help to offset slowing growth in North America.  In Western Europe, insulation demand will decelerate from the 2002-2007 period, reflecting slowing new construction activity, moderated in part by European Union directives on energy conservation to reduce carbon emissions, which will benefit retrofit building applications.  The insulation market in Japan is expected to reverse the downward trend (in terms of thermal insulating value) which has characterized the 1997-2007 period.  An expanding Japanese economy will support increased demand for insulation in construction markets.

Foamed plastic insulation will continue to account for the largest portion of total demand in dollar terms through 2012.  Economic expansion in the developing countries of Asia will raise demand for foamed plastic insulation in both building construction and in the production of household appliances.  However, moderation in plastics raw materials costs will hold down overall gains.  Fiberglass insulation will expand its presence outside North America and will increase its overall market share.  Mineral wool will see its share of the market shrink, primarily due to competition from fiberglass.  Other materials will continue to be niche products, finding use on the basis of their low cost or environmental advantages.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.