Market Trends of Facade Coatings Industry
Residential Segment to Witness Strong Growth
The growing middle-class population, combined with rising disposable income, aided in expanding the middle-class housing segment, increasing the use of facade coatings during the forecast period.
According to the United States Census Bureau, the yearly value of new construction in the United States in 2022 was USD 1,792,854 million, up from USD 1,626,444 million in 2021. Furthermore, the annual value of residential construction in the United States was evaluated at USD 908 billion in 2022, a 13% rise from USD 803 billion in 2021.
Also, according to the US Census Bureau, the seasonally adjusted annual rate of privately owned dwelling units approved by building permits in January 2023 was 1,339,000, a 0.1 percentage point higher than the revised December estimate of 1,337,000. According to the same US Census Bureau statistics release, privately owned housing completions in January 2023 were at a seasonally adjusted annual rate of 1,406,000, up 1.0 percent from the revised December estimate of 1,392,000 and 12.8 percent from the January 2022 pace of 1,247,000.
Aside from new home development, the United States invests heavily in home improvements. The necessity for rehabilitation has become increasingly critical as the country's migrant population has grown. In addition, the increased awareness of the importance of sustainability and high-efficiency constructions has fueled the restoration trend.
Eurostat, in its report, also stated that construction in housing accounted for about 5.6% of the European Union GDP in 2021. This proportion varied across the EU, ranging from 7.6% in Cyprus to 7.2% in Germany and Finland, 1.3% in Greece, 2.1% in Ireland, 2.2% in Latvia, and 2.3% in Poland.
According to the Ministry of Housing, Communities, and Local Government (United Kingdom), 177,820 dwellings were completed in 2022 in England, compared to 174,930 dwellings completed in 2021. Furthermore, according to a recent House of Commons report published in 2022, the number of households in England is expected to increase gradually to 26.9 million units by 2043, representing an annual increase of approximately 150,000 households.
Germany also approved the construction of 25,399 dwellings for October 2022. According to the Federal Statistics Office (Destatis), this reflects a 14.2% decrease in building permits from October 2021. Also, 297,453 residential building licenses were issued between January and October 2022.
All the above factors will likely increase the demand for the facade coatings market over the forecast period.
Asia-Pacific Region to Dominate
Owing to the highest residential construction activity and commercials in the Asia-Pacific region, the facade construction and its coatings accounted for the highest market share among other regional markets.
Across the Asia-Pacific region, demand for residential construction has risen due to the growing population and rapid urbanization across major economies. As per a joint study conducted by Global Construction Perspectives and Oxford Economics, India will require to build 31,000 homes every day for the next 14 years to meet the growing housing demand in the country, adding up to a total of 170 million properties by the end of 2030.
According to the Ministry of Statistics and Program Implementation, the construction sector contributed INR 2,590.98 billion (~USD 31.52 billion) to GDP in the third quarter of 2022. Furthermore, the Indian government allocated INR 48,000 crores (~USD 6.4 billion) for its 'PM Aawas Yojana' scheme in its Union Budget 2022-23, reiterating its commitment to implementing 'Housing for All,' which aims to build 80,00,000 affordable homes for the urban and rural poor in FY 2022-23. The government subsequently extended the timeline for the 'PM Aawas Yojana' scheme for rural areas in December 2022 and amended the objective to 2.95 crores (~29.5 million) dwellings.
China's construction industry is rapidly increasing and is the largest in Asia-Pacific. According to the National Bureau of Statistics of China, construction output in China in the fourth quarter of 2022 was valued at roughly CNY 276 billion (~USD 40 billion), marking a 50% increase over the previous quarter (~USD 27.6 billion).
Indonesia is also one of the largest and fastest-growing marketplaces in Southeast Asia. Furthermore, the Indonesian government has begun a program to develop approximately one million housing units throughout Indonesia, for which the government has budgeted approximately USD 1 billion.
According to Japan's Ministry of Land, Infrastructure, Transport, and Tourism (MLIT), overall investment in the construction sector in 2022 is expected to be around JPY 66,990 billion (~USD 508.16 billion), a 0.6% increase over the previous year.
All the factors above will likely increase the demand for facade coatings in the Asia-Pacific region over the forecast period.
