In this SPECIAL REPORT, we identify and assess the prevailing trends and forces that impel the construction materials sector today, so industry leaders may better understand the challenges and opportunities before them.
By taking into account the lasting effects of the Covid-19 pandemic, as well as burgeoning areas of development, and market projections against the agendas of planning systems and government mandates, decision makers can make adjustments to their business strategies based on market research to the end of the decade and plot a course for long-term sustainable growth.
Aided by the latest report by global research company, Fortune Business Insights, we attempt to forecast market behaviour up to 2030, based on existing data and industry activity since 2019.
Building materials market view
The global construction materials market was valued at USD$1,272.6 billion last year and is forecast to grow from USD$1,320 billion in 2023 to USD$1,729.6 billion by 2030, at a CAGR (compound annual growth rate) of 3.9%. Additionally, the presence of a several large building materials manufacturers in the UK (and Europe) – Wolseley (£18bn), Evraz (£13.5bn), Tata Steel (£8.8bn), Liberty Steel (£7.9bn), Jewson (£6.7bn) – is expected to contribute heavily to the consumption of these materials.
The materials market has been driven by investment in both the commercial infrastructure and residential sectors in recent years. However, greater demand for improved highways and public infrastructure, paired with higher levels of home ownership and therefore better supporting road networks, feeds the building materials market growth. “Growth in the residential sector is the major factor propelling the market growth,” the report states. This is against a background push from the UK Government for the industry to construct around 300,000 new homes a year to address housing shortages and population growth.
And while supportive public (read government-backed) infrastructure projects are expected to boost the materials market in the years to 2030, firms need to account for certain factors hindering growth, including the planning system, net zero commitments, materials and logistics costs, supply chain disruptions, inflation, environmental concerns (dust, vibration, noise etc), and competition.
Firms also need to be mindful of the growing need for authorities to ensure major infrastructure optimises resources and maximises services for its citizens, especially in areas of new expansion and remote towns earmarked for levelling up and regeneration. Planners are actively seeking ways to build ‘smarter cities’, offering clean and sustainable environments that are more inclusive, utilise data-driven traffic management systems, have intelligent lighting, and smarter and safer transport networks, which puts pressures on certain materials markets where firms can position themselves.
It is also important to note in his Spring Budget chancellor Jeremy Hunt pledged millions for highways maintenance, regeneration schemes, and Levelling Up projects across the country.
Common barriers to building materials market growth:
- Supply chain disruption
- Health & Safety reform
- Investor confidence
- Energy cost and provision
- Environmental impact
- Labour shortage
- Regulation and permissions
“The above challenges have been impacting the progress of this industry,” the report states. “The effective hour of discussion must mitigate the challenges by introducing modernisation and scaling up the labour force.”
Covid fallout
The pandemic had a significant economic impact on the building materials market and construction industry, which is still being felt today. Jobs put on hold, breaks in supply chain, unreliable resources, disrupted cashflow, and social distancing, rocked productivity and industry health.
And having witnessed the slow return to productivity through materials manufacturers starting up, paired with a much-diminished labour force in the UK, some firms have begun to put in contingencies should another crisis threaten domestic materials supply.
“After learning from harsh times, many construction firms are developing strategies to build a long-term availability of these materials by identifying the alternate possibility of material suppliers,” the report states.
Aggregates – performance
“The aggregates segment is expected to lead the market during the forecast period,” the report states.
Construction aggregates – sand, gravel, stone, slag, concrete – are in high order due to increased activity in refurbishment and renovation works across residential, and then commercial, markets, data suggests. Infrastructure and industrial projects will also “continue to generate significant demand”.
Adoption of advanced technologies, such as Building Information Modelling (BIM), is also expected to drive growth through efficiency gains, but also because higher quality products are more attractive to clients. “The growth of aggregates is anticipated to be driven by advancements in technologies for the production of aggregates, thereby boosting productivity and efficiency while producing high-quality products.”
Sustainability
“Adoption of smart technologies and sustainable materials is one of the key trends impelling market expansion,” the report states.
Smart building materials are adaptive, changing their properties to suit their environment – and clients are increasingly keen to incorporate carbon neutral approaches into their builds as part of their sustainability commitments.
Materials manufacturers are adapting modern technologies, including additive manufacturing techniques like 3D printing, to expand their market offering and reduce waste. By developing their own sustainable materials methodology, similar to smart glass or composite shingles, construction firms create a more feasible offering to clients.
Key players
- Wolseley UK
- Evraz
- Tata Steel Europe
- LIBERTY Steel Group
- Jewson
- SIG
- nVent Electric
- Selco Builders
- Plastic Pipe Systems
- Vesuvius
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