The building materials market has been forecast to reach a value of US$810.4 billion by 2018, driven by an improving economic environment and the recovery in residential and commercial construction activity.
Building materials are any material used for construction purposes. Many naturally occurring substances, such as clay, rocks, sand, and wood, even twigs and leaves, have been used to construct buildings. Apart from naturally occurring materials, many man-made products are in use, some more and some less synthetic.
Economic growth and demand for building materials always move hand-in-glove given the intricate correlation between GDP growth and the level of construction activities.
Strong economic growth, expanding population, industrialisation, and urbanisation results in increased infrastructure and housing needs thus translating into improved construction activities across all sectors - residential, commercial and infrastructure.
Historically, the housing market has accounted for about 60% of all annual domestic construction spending. This market has proven volatile. Those interested in this industry have a bevy of leading indicators to monitor, including housing starts, building permits, home sales, foreclosures, unsold home inventories, mortgage rates, and employment figures.
With the global population growing at a robust rate, specifically in developing nations, demand for housing units and infrastructure facilities continues to increase, offering huge growth opportunities for the building materials market.
Another influencing factor is the rapid urbanisation trend with an increasing proportion of the population migrating to urban and semi-urban centers in search of better prospects.
Infrastructure (e.g., roads, bridges, and water projects) is one of the most stable subsectors. Still, this area is not immune to macroeconomic conditions. For instance, highway construction is largely funded through government taxes on gasoline and diesel fuel, suggesting dependable funding.
But receipts can rise and fall, depending on driving patterns, which are influenced by the health of the economy. Though infrastructure construction is often delayed due to budget constraints, projects are rarely cancelled.
Asia-Pacific represents the largest and the fastest growing market for building materials, worldwide. Strong construction activities as a result of mass exodus of manufacturing and production bases to low-cost Asian countries, continuous industrialisation in regional powerhouses such as China and India, and growing demand for residential and commercial constructions are expected spur demand for building materials in the region.
For more information on the building materials market, see the latest research: Building Materials Market
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