New Delhi, April 10, 2024 (GLOBE NEWSWIRE) -- Astute Analytica estimates that the North America cladding systems market is projected to reach US$ 123.6 billion by 2032, up from US$ 66.1 billion in 2023, at a CAGR of 7.21% during the forecast period 2024–2032.
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The US construction market is a massive economic force, valued at $2.1 trillion in 2022 with projections for an average annual growth rate of over 4% between 2024 and 2027. This growth is fueled by ongoing investment in energy, transportation, housing, and manufacturing sectors. As of January 2023, US construction spending stood at $1.823 trillion. The industry is a major employer, with over 919,000 construction establishments supporting 8.0 million employees who collectively create nearly $2.1 trillion worth of structures annually. Wherein, the residential sector is a key part of the cladding systems market, and its performance in 2024 will be strongly influenced by broader economic factors. Rising interest rates and inflation led to a 9% decrease in total housing starts from January to August 2023 compared to the previous year. These factors also contributed to housing prices in US cities increasing 5.7% year-over-year in August 2023. As the costs of materials and labor continue to fluctuate due to economic uncertainty, margins in the construction industry, including those involved with cladding systems, could diminish. Developers and contractors will need to carefully navigate financing challenges if the Federal Reserve continues to raise interest rates.
Economic Headwinds
These challenges within the US cladding systems market reflect a wider trend. The global construction industry is expected to experience slower growth of 1.8% in 2023 due to high inflation and tightening monetary policies. The US construction industry, making up 4% of the nation's GDP, is not immune to these global economic headwinds. In 2023, the value of new private construction in the US stood at $1,429 billion, while monthly privately owned housing starts averaged 114k. While non-residential construction spending is forecast to continue through 2027, the industry is likely to face lingering effects of economic uncertainty into 2024.
The construction industry is a cornerstone of the US economy, serving as a major customer for manufacturing, mining, and numerous services. Volatility remains a defining factor in the construction market; the industry life cycle and performance of both specific products and services (like cladding systems) will be affected by economic conditions. Individual markets within the construction sector will also play a role. For example, projects like the Mandarin Oriental hotel in Miami demonstrate potential, while backlogs in the industry could help some firms weather economic uncertainty.
Key Takeaways
- The US construction market is massive and important, but faces economic headwinds that will also impact the cladding systems market.
- Rising interest rates, inflation, and tighter monetary policy create specific challenges for both residential and non-residential construction.
- The cladding systems market will be reliant on the performance of the wider construction industry, and must adapt to economic volatility.
Key Findings in North America Cladding systems market
| Market Forecast (2032) | US$ 123.6 billion |
| CAGR | 7.21% |
| By Material | Ceramic (25.8%) |
| By Type | Wall (60.9%) |
| By Installation Methods | Wet Cladding Systems (56.8%) |
| By Finish | Matte (62.0%) |
| By End Users | Non-Residential (56.6%) |
| By Project Type | New Construction Projects (70.1%) |
| Top Trends |
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| Top Drivers |
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| Top Challenges |
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Ceramic Cladding Dominate North America Cladding systems market With Over 25.8% Market Share: The Durable, Aesthetic, and Energy-Efficient Choice
Ceramic cladding systems hold a dominant position within the North American market. This is largely due to their exceptional durability and low-maintenance requirements. Ceramic cladding panels are incredibly resilient, withstanding harsh weather conditions with ease. This durability leads to significant cost savings over time, as there's minimal need for repairs or replacements. Additionally, the hygienic nature of ceramic and its ease of cleaning make it a highly attractive choice, further bolstering its popularity. Beyond practical advantages, ceramic cladding offers unparalleled aesthetic appeal. Factory-finished panels come in a wide array of colors that retain their vibrancy for years thanks to specialized UV-blocking ceramic coatings. This allows architects and building owners to achieve their desired visual impact without fear of fading or discoloration.
The growing prioritization of energy efficiency also contributes to the demand for ceramic cladding systems market in North America. Cladding provides valuable insulation and weather protection, resulting in reduced energy consumption and lower utility costs. This is particularly important in Europe, where building regulations are stringent in an effort to decrease energy usage and carbon emissions. Technological advancements within the ceramic cladding industry continue to drive innovation, offering solutions that are increasingly efficient, attractive, and sustainable.
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North America's Construction Boom Drives Demand for Cladding Systems for Wall Segment, Contribute Over 60.9% Revenue Share
The robust construction industry in North America is a major catalyst for the growth of the regional cladding systems market. This demand stems from a need for superior exterior wall protection and a surge in non-residential infrastructure projects. Additionally, ongoing efforts by the US and Canadian governments to bolster social infrastructure further contribute to this demand. Rapid urbanization and population growth within North America directly translate to a high demand for wall cladding materials. The accelerating shift towards urban living creates a consistent need for new residential and commercial construction projects. This ongoing population shift, coupled with industrialization across the region, offers significant future growth potential for the cladding systems market.
The evolving aesthetic preferences for walls of North American consumers also play a role in the market's growth. The desire for stylish interiors in both homes and offices directly influences the demand for wall cladding products. In addition to aesthetic appeal, the escalating demand for energy-efficient buildings in North America propels the adoption of wall cladding systems that deliver insulation and weather protection. Government regulations and initiatives centered on construction standards and investment further support a favorable market environment for cladding systems in the region.
New Construction Activities are Leading Consumer of Cladding systems market, Contribute Over 70% Market Revenue
The surge in new construction activities across North America is directly fueling the demand for cladding systems. This is evident in the sharp increase in real nonresidential construction spending, which rose roughly 15% from November 2021 to April 2023. Both public and private construction spending figures reveal significant gains, with a 7% increase in real public construction spending and a nearly 20% increase in real private spending during the same timeframe.
These trends in the construction sector are mirrored by robust lending activity in the residential market. In the second quarter of 2023, banks and other lenders issued over 1.5 million residential mortgages, representing a substantial 20.8% increase from the previous quarter. This increased lending activity was widespread, impacting more than 95% of the nation. Notably, purchase loans accounted for roughly half of all mortgages issued in the U.S. during this period, further emphasizing a strong focus on new construction rather than solely refinancing existing properties.
North America Cladding System Market Key Players
- AltusGroup
- Arconic
- Centria (Nucor)
- Cladding Corp
- Cladify
- Dow Inc.
- Etex Group
- Kingspan Group PLC
- Knauf
- NICHIHA
- OmniMax International, Inc.
- Saint Gobain
- Rieger Architectural Products
- ROCKWOOL A/S.
- SFS Group
- Shildan, Inc.
- Sto SE & Co. KGaA
- Tata Steel
- Trespa International B.V.
- WIEDEHOPF
- Other Prominent Players
Key Segmentation:
By Material
- Ceramic
- Brick & Stone
- Metal
- Wood
- Vinyl
- Stucco & EIFS
- Fiber Cement
- Others (Concrete, Weatherboard, Glass, HPL)
By Type
- Walls
- Exterior
- Interior
- Roofs
- Others (Vents and Gutters)
By Installation Methods
- Wet Cladding Systems
- Dry Cladding Systems
- Panelized Systems
By Finish
- Matte
- Gloss
- High Gloss
- Semi-Gloss
By Project Type
- New Construction
- Retrofit
By End User
- Residential
- Custom Home
- Luxury Home
- Multi- Family Homes
- Student Housing
- Others
- Non- Residential
- Commercial
- Offices
- Restaurants
- Hotels & Hospitality
- Community Center
- Convenience Store
- Dorm
- Education & Institutional
- Entertainment Facility
- Recreation & Event Center
- Municipal
- Retail
- Credit Union / Bank
- Religious Buildings
- Others
- Industrial
- Distribution Center/Warehouse
- Manufacturing Facility
- Water Treatment Plant
- Data Centers
- Medical & Health Care
- Marine
- Cold Storage Facilities
- Others
- Infrastructure
- Airports
- Railway Stations
- Bridges
- Tunnels
- Museums and Cultural Centers
- Others
- Government
- Others
- Commercial
By Country
- The U.S.
- Canada
- Mexico
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