US insulation industry analysis- market environment factors, details industry structure, evaluates company market share

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US demand for insulation is forecast to rise 7.8% annually to $8.9 billion in 2016. Advances will be stimulated by a rebound in building construction expenditures from a depressed 2011 base. Further growth will be fueled by changes in building codes and continuing consumer interest in reducing energy consumption and utility bills. Homeowners and building owners will add or upgrade insulation to achieve these goals.

US insulation Industry

Published: March 2012
No. of Pages: 331
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Residential market to post double-digit advances
The residential market will post the most rapid gains through 2016, advancing at a double-digit pace as housing starts rebound. Moreover, builders will construct homes with larger amounts of insulation to make them more desirable to potential buyers. Residential insulation demand will also be supported by the attic reinsulation and improvement and repair markets. The nation’s large stock of older homes -- many of which are underinsulated -- will offer growth prospects as homeowners add insulation to attics, walls and basements to lower utility bills.
Insulation demand in the nonresidential market will also see advances. Rebounding nonresidential building construction expenditures, particularly in the office and commercial segment, will promote gains. Continuing interest in environmentally friendly construction practices will boost insulation use, as building codes and “green” building standards will call for the use of more insulation to reduce energy consumption. Industrial insulation demand will be supported by rising industrial construction spending.

Fiberglass insulation to remain dominant material
Fiberglass insulation accounted for the largest share of insulation demand in 2011 with about half of the US market. Fiberglass insulation will remain the market leader in 2016, with demand rising 8.1% annually to $4.4 billion. Growth will be spurred by the rebound in the residential market. Fiberglass insulation remains a popular choice with builders and contractors because of its low cost, favorable insulative properties and ready availability.

Demand for foamed plastic insulation, which accounted for the second largest share of the market in 2011, is expected to rise 7.3% per year to $3.9 billion in 2016. Advances will be driven by the rebound in building construction spending. Further growth will come from building code changes that call for structures to be better sealed against air leaks. Foamed plastics are well suited for sealing hard-to-reach areas, such as crawl spaces and between walls. While small in value terms, cellulose insulation is forecast to see the most rapid demand growth through 2016, rising over 15% yearly. A rebound in new housing spending -- the primary market for cellulose insulation -- will drive gains. Demand will also be boosted by consumer interest in this product type because of its perception as an environmentally friendly building material.

Demand for radiant barrier and reflective insulation is forecast to rise 8.7% per year through 2016. The rebounding housing market will boost demand, with further gains supported by increases in industrial and nonresidential building construction spending. Growth will be concentrated in the South and West regions, as structures in those regions are more often exposed to sunlight, and thus best benefit from the use of radiant barriers and reflective insulation.

Of the other insulation categories:
  • Demand for mineral wool, which dropped 0.3% annually between 2006 ($117 million) and 2011 ($115 million) is expected to grow 4.7% per year to hit $145 million in 2016
  • Cellulose dropped 2% per year between 2006 ($212 million) and 2011 ($85 million) and is expecting a boost of 15.5% annually to $175 million in 2016
Company Profiles for 35 players such as CertainTeed, Dow Chemical, Johns Manville and Owens Corning

Additional Information
This comprehensive study examines the US insulation industry by product, market and region. Historical data are provided for 2001, 2006 and 2011 with forecasts for the years 2016 and 2021. “Demand” is defined as production plus imports minus exports, and is synonymous with terms such as “sales” and “apparent consumption.” Data are presented in millions of US dollars, millions of pounds and billions of square feet of R-1 value.

Macroeconomic and demographic indicators presented in this study were obtained from The Freedonia Group Consensus Forecasts dated February 2012. Throughout this study, demand is related to various indicators for comparative purposes and to facilitate further analysis. Tabular details may not add to totals due to independent rounding, and calculated ratios reflect unrounded numbers.

Information and data on the insulation industry were obtained from a variety of primary and secondary sources. Consultations with producers, end users and trade association personnel were pursued. Secondary data were obtained from government sources, as well as trade associations and other private sources. Corporate information sources included annual reports, SEC Form 10-K filings, product releases and conversations with responsible officers within the companies themselves. Publications used for background information included ENR/Engineering News-Record, Insulation Outlook, The Journal of Light Construction and Professional Roofing.

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