Through 2024, global demand for siding (cladding) is projected to grow 1.9% annually to 6.6 billion square meters, according to a new Freedonia Group analysis. Though the larger residential market is forecast to account for a slightly larger share of total increases through the forecast, a faster anticipated rebound in commercial building construction activity as the effects of the COVID-19 pandemic recede will aid overall demand growth. Through 2024, global siding demand will be supported by:
- rising new home construction, especially in developing Asia/Pacific and Africa/Mideast countries where the share of homes built with siding is growing
- increasing personal incomes, which allow for greater spending on renovation projects such as siding replacement
- ongoing introduction of affordable fiber cement and vinyl siding products, which can be made to resemble high-end materials (e.g., wood, stone) while providing installation and performance advantages
Highlighted below are some of the key trends to watch in the global siding market through the end of 2020 and beyond.
COVID-19 Impact on Global Siding Demand: Decline in 2020, Swift Rebound in 2021
Weakened global building construction activity due to the COVID-19 pandemic will cause siding demand to decline in 2020, but the market is expected to rebound quickly in 2021 as case numbers fall, economies reopen, and building activity returns to normal levels.
Siding demand for residential buildings has shown more resiliency in 2020 despite a decline in new housing units globally. Renovations have held steady and even spiked in some countries as consumers opt to invest money on the homes in which they now spend more time as a result of stay-at-home orders and a shift toward telecommuting.
Meanwhile, the nonresidential market for siding has been affected by steep declines in revenues and profitability for a wide range of businesses, which has made business owners and building managers reluctant to engage in capital improvement projects.
However, the longer term outlook beyond the pandemic projects more favorable growth prospects for the smaller commercial building market for siding as economies re-stabilize and investments ramp back up. Meanwhile, despite elevated demand for home renovations amid the pandemic, long term advances in the residential market will be restrained by lackluster anticipated growth in homebuilding activity.
Key Regional Construction Trends Affecting the Global Siding Market
Of course, construction trends vary widely by region and country. For instance:
- The Asia/Pacific region is forecast to account for about half of global siding market gains through 2024, supported by continued healthy expansion in nonresidential building construction, as well as rising homebuilding activity in major markets such as India and South Korea.
- China, the world’s largest siding market, will continue to drive regional demand growth as ongoing, if moderating, strength in nonresidential construction offsets stagnation in the number of new housing units.
However, faster increases in global siding demand will be restrained by market maturity and below average gains in building construction (particularly homebuilding activity) in more developed parts of the world, including the US, Japan, and several countries in Western Europe. Nevertheless, rising spending on home renovations will support growth in these markets, despite weak outlooks for nonresidential construction activity.
Siding Material Competition Varies by Market
A number of factors influence siding purchasing decisions, including budget, performance needs, and aesthetic preferences. For instance, aesthetics factor more in the residential market (and public-facing commercial buildings such as offices and restaurants), whereas performance attributes like durability and fire resistance are more a priority for nonresidential end users. As a result, material mix varies significantly by market. For instance,
- Brick and tile dominate the global siding market due to its durability and its wide availability in developing Asia/Pacific and Africa/Mideast countries supporting the material’s use in both residential and nonresidential applications. Conversely, in developed markets such as the US and Western Europe, brick and tile siding is generally reserved for residential applications where aesthetics are a priority.
- Fiber cement is more popular in residential siding markets due to its aesthetic and cost advantages. Though demand is currently mostly concentrated in the US and Japan, fiber cement is increasingly competitive with higher value siding materials such as brick and stone because of its ability to mimic their appearance while being easier to install.
Through 2024, metal will continue to increase its share of the global siding market, driven by growth in nonresidential building construction, where metal siding is more commonly specified because of its durability. Concrete and stone siding demand will also benefit, as these products are used more intensively in nonresidential applications due to their durability, fire resistance, low maintenance requirements, strong acoustic and thermal insulative properties, and (particularly in the case of concrete) affordability.
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About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.