Market Trends of Precast Concrete Industry
Residential Segment is Expected to Dominate the Market
- Precast concrete plays a pivotal role in residential construction, delivering substantial advantages to both homeowners and builders. This concrete is manufactured in a factory and then hauled to the building site, where it is assembled into the desired structure.
- During manufacturing, precast concrete materials are both precast and prefabricated. These structures accelerate construction speed and productivity and enhance cost and quality control. As the need for cost-effective and safe materials grows, so does the demand for precast concrete.
- Moreover, precast structures are deemed sustainable building materials, as they can be reused or remolded multiple times, thereby minimizing their environmental footprint.
- Driven by significant population growth, there's a rising demand for affordable residential properties. The efficiencies and speed offered by precast methods further bolster this demand. Additionally, as old buildings undergo conversion and renovation, investments in the construction industry surge, amplifying the appetite for prefabricated parts and propelling the precast construction market's growth.
- Asia-Pacific, buoyed by rising disposable incomes and urbanization, leads in housing construction activities. Within this region, China, India, and ASEAN countries spearhead construction activities, responding to the surging demand for building projects.
- India's real estate sector is on track to hit a valuation of USD 1 trillion by 2030, aiming to contribute 13% to the nation's GDP. With projections indicating that over 40% of India's population will demand medium-sized and affordable housing units by 2030, the market for precast construction stands to benefit significantly.
- Public residential construction spending in the United States has seen a notable uptick. Data from the US Census Bureau reveals that in 2023, the public sector allocated nearly USD 10.7 billion to residential construction, marking a 7% rise from the previous year.
- Additionally, the United States remains a dominant player in the building and construction arena. According to US Census Bureau data, August 2024 saw privately-owned housing starts at a seasonally adjusted annual rate of 1.36 million units. This figure not only surpasses July 2024's revised estimate of 1.24 million units by 9.6% but also exceeds August 2023's rate of 1.31 million units by 3.9%. Single-family housing starts for the same month stood at 992 thousand units, reflecting a 15.8% increase from July's 857 thousand units.
- Italian cities like Milan and Rome are witnessing a surge in residential high-rise constructions. Innovative designs and the potential for groundbreaking high-rises have spurred Italy's precast concrete consumption. Data from the National Institute of Statistics (ISTAT) indicates a year-on-year rise in construction permits for dwellings in early 2024, with approximately 14,730 homes receiving permits in early 2023.
- Rapid urbanization is fueling substantial private investments in Brazil's residential sector. In response to this surging demand, the government reintroduced the "Minha Casa, Minha Vida" (My Home, My Life) initiative in February 2023, setting an ambitious goal of 2 million new projects by 2026.
- In South Africa, major housing projects are on the horizon, signaling a growing demand for precast concrete. Notably, the Southern Farms Biodiversity Development Project, launched in December 2023, aims to deliver 45,000 housing units by its 2026 completion date.
- Given the dynamics dynamics highlight a robust and promising growth trajectory for precast concrete in residential construction during the forecast period.
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North America Region is Likely to Dominate the Market
- North America is set to lead the market, driven by a surge in construction activities across both residential and commercial sectors.
- Countries like the United States, Canada, and Mexico are witnessing positive growth trends, fueling the demand for precast concrete products and their applications.
- The demand for precast concrete is surging as the construction industry increasingly seeks dynamic building materials and emphasizes robust construction.
- Precast concrete is pivotal in commercial construction, offering benefits like speedy assembly, superior quality, durability, and cost efficiency. It's particularly favored for projects such as office buildings, shopping centers, and hotels, where aesthetics, functionality, and sustainability are paramount. Given the region's expanding commercial construction, the demand for precast concrete is poised to rise in the coming years.
- New commercial projects in the United States are set to further elevate the demand for precast concrete. For instance, in January 2024, Indiana's government and Meta Platforms Inc. commenced an USD 800 million data center campus in Hoosier State, projected for completion in 2026, spanning 700,000 square feet at River Ridge Commerce Center.
- Precast concrete is also crucial in residential construction, offering speed, quality, durability, and cost-effectiveness. It's the preferred choice for projects like single-family homes, apartments, and condominiums, emphasizing aesthetics, functionality, and sustainability. With the region's residential construction on the rise, so too is the demand for precast concrete.
- The United States boasts a significant building and construction market. Data from the US Census Bureau indicates that in 2023, the United States construction value reached USD 1,978.7 billion, marking a 7% increase from 2022's USD 1,848.7 billion. However, residential construction alone accounted for USD 864.9 billion.
- In August 2024, the United States granted building permits for a seasonally adjusted annual rate of 1.48 million housing units. This represents a 4.9% increase from July's rate of 1.41 million units, although it's 6.5% lower than the 1.58 million units authorized in August 2023.. Single-family authorizations in August 2024 reached 967 thousand units, up 2.8% from July's 2024 941 thousand, according to the US Census Bureau.
- Precast concrete's durability and resistance to various challenges make it a top choice for industrial construction. As investments in industrial construction rise in the region, the demand for precast concrete is set to follow suit.
- Data from the US Census Bureau highlights that in 2023, the computer, electronic, and electrical industry topped the list in United States manufacturing construction spending, while the chemical industry projects reached USD 34 million and the food, beverage, and tobacco industry saw USD 16 million in spending.
- Canada's booming building and construction industry is set to elevate the demand for precast concrete, signaling a promising future for the market.
- According to Statistics Canada, new home construction surged in Canada’s 6 largest census metropolitan areas (namely Calgary, Toronto, Ottawa, Edmonton, Vancouver, and Montréal) and remained high in 2023. the country witnessed a 7% surge in apartment (purpose-built and condominium) construction, as per the report of Statistics Canada.
- Toronto is witnessing a skyscraper construction boom, with over 30 high-rise buildings slated for completion by 2025 and another 50 in the proposal and planning stages.
- Further, in April 2024, the government of Canada announced its plans to lease public land to developers for the construction of affordable houses to ease the shortage of homes. Through this project, the country aims to build nearly 3.9 million houses by 2031.
- As per the data from the Canadian Construction Association, the construction sector, a major player in Canada's economy contributing 7% to the GDP, is buoyed by government initiatives like the New Building Canada Plan (NBCP) and the Affordable Housing Initiative (AHI).
- Owing to its durability and strength, precast concrete is the preferred choice for infrastructure projects, including roads, bridges, airports, and seaports. As infrastructure construction continues to surge in the region, the demand for precast concrete is projected to increase in the coming years.
- In recent years, Mexico's government has actively championed infrastructure development, aiming to strengthen the nation's economic foundation.
- Global Impact Assets (GIA) projects steady growth for Mexico's construction industry, averaging 2.8% annually from 2023 to 2032, as highlighted in their Infrastructure Outlook report.
- This positive outlook is bolstered by a notable increase in infrastructure funding, evidenced by a 20% surge in federal investments in 2023. A highlight of these investments is the Tren Maya (Mayan Train) project, which received a significant USD 7.8 billion allocation in the 2023 budget, with total capital expenditure estimates ranging from USD 15 to 20 billion.
- Given these dynamics, the precast concrete market in the region is poised for steady growth during the forecast period.
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