Cladding Systems Market Overview
The Cladding Systems market size is estimated to reach US$270 billion by 2027, after growing at a CAGR of 6.1% during the forecast period 2022-2027. The global expansion of the construction sector is one of the primary reasons driving the growth of the cladding systems market. The growth of cladding systems in residential construction is driven by the rising demand for private dwellings as well as investments in housing projects. Cladding is a material such as timber, metal, fiber cement, etc which is used to cover the exterior structure. The cladding system is based on a unique feature that adds an aesthetic appearance to its look. The COVID-19 pandemic majorly impacted the cladding systems market due to restricted production, supply chain disruption, logistics restrictions and a fall in demand. However, with robust growth and flourishing applications across major industries such as residential, industrial and others, the Cladding Systems market size is anticipated to grow rapidly during the forecast period.
Cladding Systems Market Report Coverage
The “Cladding Systems Market Report – Forecast (2022-2027)” by IndustryARC, covers an in-depth analysis of the following segments in the Cladding Systems industry.
By Material: Wood, Vinyl,
Brick & Stone, Metal, Fiber Cement, Timber and Others.
By Application: Window, Doors, Walls, Roof and Others.
By End-use Industry: Residential (Private Dwellings, Row Houses and Apartments), Commercial (Hospital, Airports, Offices, Retail and Others) and Industrial (Manufacturing Facilities, Warehouses and Others).
By Geography: North America (the USA, Canada and Mexico), Europe (the UK, Germany, France, Italy, the Netherlands, Spain, Belgium and the Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia and New Zealand, Indonesia, Taiwan, Malaysia and the Rest of APAC), South America (Brazil, Argentina, Colombia, Chile and the Rest of South America) and the Rest of the World [the Middle East (Saudi Arabia, the UAE, Israel and the Rest of the Middle East) and Africa (South Africa, Nigeria and the Rest of Africa)].
- Asia-Pacific dominates the Cladding Systems market size. The increase in demand from end-use sectors, such as residential, commercial, industrial and others, is the main factor driving the region's growth. According to the Department for Promotion of Industry and Internal Trade (DPIIT), in India, between April 2000 and December 2021, foreign direct investment (FDI) in the construction development and construction activity sectors totaled US$26.17 billion and US$26.30 billion, respectively.
- The increase in the number of construction projects around the globe is one of the primary reasons driving the growth of the cladding system industry.
- Housing innovation and demand for fireproof and soundproof walls in many industries are factors influencing the growth of the Cladding System market.
- The market's expansion is projected to be hampered by high raw material costs.
Figure: Cladding Systems Market Revenue Share by Geography, 2021 (%)
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Cladding Systems Market Segment Analysis – by Material
The Fiber Cement segment held the largest share in the Cladding Systems market in 2021 and is projected to grow at a CAGR of 5.7% during the forecast period 2022-2027. The growth is due to the extensive characteristics provided by fiber cement when compared to other material types such as timber and metal. Fiber cement features high durability, low maintenance cost and cost-effectiveness. These panels are gaining popularity in the cladding market because they are weatherproof and can withstand high-pressure winds and rainwater. Significant potential in the industry includes increased investment in the industrial sector and a desire for special-purpose fiber cement, which enhances the Cladding Systems industry.
Cladding Systems Market Segment Analysis – by End-use
The Residential segment held the largest share in the Cladding Systems market in 2021 and is estimated to grow at a CAGR of 6.6% during the forecast period 2022-2027. Cladding is used in buildings to provide thermal insulation, weather resistance, fire resistance and aesthetic appeal. Cladding demand in the residential construction sector is expected to rise significantly as a result of rising awareness about energy-efficient structures, the need for building rehabilitation, increased over-cladding operations and government mandates for green buildings. The Argentina government presents a US$428mn housing construction plan. According to the National Institute of Statistics and Censuses (INDEC), the value added by the residential industry increased by 37.1 percent in the first three quarters of 2021. With the rise in residential projects across the globe, the demand for Cladding Systems is anticipated to rise for various applications, which is projected to boost the market growth in the residential industry during the forecast period.
Cladding Systems Market Segment Analysis – by Geography
The APAC segment held the largest share in the Cladding Systems market in 2021 and is estimated to grow at a CAGR of 7.0% during the forecast period 2022-2027. The fueling demand and growth of fiber cement in this region are influenced by flourishing demand from construction industries and the rising number of construction activities across APAC. According to the International Trade Administration, the construction sector in China is projected to grow at an average of 8.6% from the year 2022 to 2030. Furthermore, the Make in India campaign by the Government of India plans to achieve infrastructural investment worth US$965.5 million by the year 2040. With the rise in commercial projects across APAC, the demand for Cladding Systems is anticipated to rise for various applications, which is projected to boost the market growth in the construction industry during the forecast period.
Cladding Systems Market Drivers
Government Initiatives are Influencing the Growth of the Commercial Sector:
The demand for Cladding Systems is rapidly growing as government investments in the commercial industry are increasing. For instance, Kansai International Airport in Japan would spend about 100 billion yen ($911 million) by 2025 to upgrade the larger terminal to increase space for international flights at the country's No. 2 hub. The Indian Union Budget of February 2020 aimed to build 100 new airports by 2024 as part of the Centre's Udan scheme to help with growing air traffic. The Ministry of Housing and Urban Development (MoHUA) has been given Rs 50,000 crore (US$6.8 billion) and a fund of Rs 25,300 crore (US$3.5 billion) is initiated to help complete stalled housing projects. With the robust growth of the commercial industry and due to an increase in government initiatives, the demand for cladding systems in construction would rise. Thus, it is anticipated that the demand for the Cladding Systems industry would flourish during the forecast period.
Bolstering Growth of the Residential Industry:
Cladding Systems have seen a huge increase in their usage and application in residential areas. Additionally, individuals are remodeling their homes in accordance with trends to improve their visual appeal. Due to these comprehensive qualities and Urbanisation, the market for cladding systems for the residential industry is growing. The Brazilian government has implemented the Casa Verde e Amarela housing program, under which the government would provide housing financial assistance to 1.6 million low-income families by 2024. According to Japan's Ministry of Land, Infrastructure, Transport and Tourism, the construction order for new houses rose to 32.3% in June 2021, compared to 13.4% in June 2020. Thus, with flourishing demand in the residential industry, the Cladding Systems industry is growing rapidly.
Cladding Systems Market Challenge
High raw material Cost:
The main factor limiting the growth of Cladding Systems' popularity is their high cost and slightly complicated installation process. Timber, metal, fiber cement are the most common materials used in the production of cladding systems. The main cause of fluctuations in raw material prices is volatility in the prices of energy and crude oil, which are used in manufacturing and transportation. According to the BP Statistical Review of World Energy 2021 report, crude oil prices have fluctuated in recent years. The Brent crude oil price decreased from US$52.39/bbl in 2015 to US$43.73/bbl in 2016, then increased from US$54.19/bbl in 2017 to US$71.31/bbl in 2018 and then decreased to US$41.84/bbl in 2020. These fluctuations, in turn, cause price volatility in finished goods. However, major players regularly engage in innovations and R&D activities to reduce the price disparity between these products. Thus, the market's expansion is projected to be hampered by high raw material costs.
Key Market Players
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Cladding Systems market. The top 10 companies in the Cladding Systems market include:
1. Saint-Gobain S.A.
3. Tata Steel Limited
4. CSR Limited
5. ETEX Group
6. Kingspan PLC
7. Boral Limited
8. Westlake Chemical
9. James Hardie Industries PLC
10. Rockwool International
- In September 2022, VOX introduced new products in India. Soffit Infratop - Innovative Ceiling System, Kerradeco - the Innovative Wall systems - For Interior Wall Cladding, Max 3 external cladding systems and Kerrafront External cladding systems from VOX were launched in India.
- In April 2021, Proteus Facades introduced rainscreen cladding ranges in the United States. Aluminum honeycomb cores are used in the design and manufacturing, allowing the systems to create some innovative facades using materials such as Copper Alloys, Zinc and Stainless Steel.
- In November 2020, Maple introduced a market-leading rain-screen cladding system that is high-performing, strong and easy to install. It is intended to address the industry's major manufacturing and installation pain points.
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