It’s not just the lumber shortage driving up new home prices.
In addition to a hot real estate market, a related boom in building activity in the US is driving a surge in demand for a range of building materials – from drywall and concrete to paint, pipes, and wires – that suppliers can’t get to builders fast enough. As a result, prices for these and other materials frequently used in new housing construction are rising, adding significantly to the final cost of newly built homes.
Concrete Among Materials Most Affected by Booming Building Activity
Though less severe than lumber, cement and concrete products have seen an outsize impact of these building trends, with prices rising substantially over the course of the pandemic and reaching a record level in April. That’s in part because, like lumber, no other material competes effectively with concrete in key homebuilding applications, notably foundation slabs. It is also widely used in outdoor living installations like patios, pools, and outdoor kitchens – all popular home improvement projects, which exploded in number during the pandemic.
The pricing spike is expected to be only temporary, however; as demand abates somewhat and suppliers catch up, prices for concrete and other building materials will come back down.
Global Demand for Cement to Hit $340 Billion in 2025
A new Freedonia Group analysis projects global demand for cement to rise 2.9% per year to 4.7 billion metric tons valued at $340 billion in 2025. The relatively restrained pace of growth will be due to slow projected expansion in the dominant Chinese market. If China is excluded, the global cement market is expected to expand 5.3% yearly, supported by:
- large-scale infrastructure projects in Asia/Pacific and Africa/Mideast regions, including those supported by China’s Road & Belt Initiative
- rising urbanization, which will boost demand for cement in the both the residential and nonresidential markets
- ongoing efforts by governments to improve housing stocks in developing countries, where cement is often the preferred construction material because of its durability
- increasing modernization and technological advancement of the cement industries in low-income and developing economies
- growing interest in cement products with improved energy efficiency and environmental profiles, buoying demand for cement in applications where it had not been commonly used
Want to Learn More?
Global Cement is now available from the Freedonia Group. This study examines the global market for cement by type, market, and end user. Historical data for 2010, 2015, and 2020, and forecasts for 2025 and 2030 are provided for cement demand in metric tons.
Cement types are:
- blended cement
- portland cement: (general use gray cement; high early strength and sulfate-resistant cement; oil well cement; white portland cement)
- specialty cement (i.e., fly ash, slag, and other pozzolanic cements; masonry cement; aluminous or high-alumina cement)
In addition, demand is analyzed by market:
- residential building construction
- nonresidential building construction
- infrastructure and other markets, including roads, bridges, and other nonbuilding construction (e.g., public utility structures, airports, military facilities, parks, playgrounds)
Cement demand is also analyzed by end user, such as:
- ready-mix concrete producers
- concrete product manufacturers (includes non-construction-related concrete products such as statues and wall plaques)
- consumers (e.g., DIY housing construction, home improvement and repair projects)
- other users/uses, including agricultural and governmental users, hazardous waste disposal, decorative applications, protection from weather and harmful compounds