SOURCE: Freedonia Group, Inc.

May 11, 2006 14:58 ET

U.S. Insulation Demand to Reach $9.8 Billion in 2010

CLEVELAND, OH -- (MARKET WIRE) -- May 11, 2006 --Demand for insulation materials in the United States is forecast to advance nearly 5 percent per annum through 2010 to $9.8 billion. Insulation will benefit primarily from renewed growth in nonresidential building construction, coupled with gains in appliance and transportation markets. Greater insulation use per structure and upgrades of insulation for existing buildings (both residential and nonresidential) will also boost insulation demand. These and other trends including market share and market size are presented in "Insulation," a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

Fiberglass insulation remains the leading insulation material in use, accounting for more than half of demand in dollar and volume terms in 2005. Growth will be driven by more intensive use of fiberglass insulation per new housing unit, sparked by expanded concerns about energy efficiency, ease of installation and favorable cost factors. However, an expected weakening in the housing market through 2010 will moderate gains in the fiberglass segment given that fiberglass accounts for the vast majority of insulation used in residential applications. Better prospects will exist for fiberglass used in reinsulation applications, by both do-it-yourselfers and professional installers.

Foamed plastic insulation is the second largest insulation product in use in the US, accounting for nearly 45 percent of demand in value terms and almost 30 percent in volume terms. Advances will derive from accelerating nonresidential building construction and production of appliances and transportation equipment. Reflective insulation and radiant barriers will see good growth (from a small base) as they find increasing use in metal buildings and other nonresidential structures, as well as in pipe wrap, appliances and duct insulation, as a means of reducing energy costs.

Gains will be more robust in replacement markets, as the decline in single-family home construction inhibits demand in new residential building. Nonresidential construction will provide the greatest growth opportunities, as the construction of office, commercial, industrial and other nonresidential buildings recovers following a period of sustained decline during the 2000 to 2005 period. Transportation uses will also post above-average gains through 2010.

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