Commercial Insulation Market Demand Boosted by Increasing Consumption in the Construction Sector

Published On: March 2018

How does the present scenario look like?

The commercial buildings account for the maximum emission of carbon dioxide as compared to other sectors like transportation and Industry. According to the U.S Green Building Council (USGBC), 39% of carbon emission accounts from buildings per year in the U.S. This emission is responsible for the global warming to some extent. However, smart buildings are the best solution to reduce the carbon dioxide emission. This can be achieved by installing commercial insulation, which consumes less electricity and helps to reduce carbon dioxide emission. Most of the countries are investing in building green technology to serve better and save the environment.

Aluminum is the prominent raw material used in the commercial insulation production. It provides better insulation in the form of wraps/sheets. However, the market is facing challenges owing to low awareness about the advantage of commercial insulation. North America and Europe are the major consumers building demand for environment-friendly technology. However, a huge construction development in the Asia Pacific region is likely to drive the demand for smart technologies in the next five years. Additionally, rapid infrastructure development in the Middle East to increase the tourism is expected to have a subsequent demand for new technologies to build energy-efficient buildings. These technologies fulfill the demand with the installation of commercial insulation in commercial applications, such as institutional, hospitals, office buildings, malls, airports, food & beverage, residential buildings, general commercial, warehouses, and other commercial buildings.  

Where is the business opportunity?

The Middle East expected to have various opportunities for commercial insulation players in UAE and Qatar due to increasing construction activities in building malls, institutional, hospitals, office buildings, and commercial buildings. Some of the under-construction projects in the UAE are Capital District, Business Bay, Masdar City, and Al Burjeel Hospital. Similarly, In the Asia Pacific region, Singapore is the most attractive place for investors. However, the market in India and China is now gaining attention of investors by providing a huge business potential to foreign players. The infrastructure development increases the market for the construction sector and the commercial insulation as well. However, with strong economic and financial sector and low-risk environment tend to have good investment opportunities in the U.S. during the forecast period.

Growing disposable income along with the increasing penetration of organized commercial insulation market in North America and Europe are driving the demand for new and renovation of commercial buildings. In developing countries, the shift of villages and unstructured towns to urban and metropolitan cities are also the major factor increasing the demand of commercial insulation.

What should be the business strategy?

The players in the commercial insulation market must focus on the major developing construction sector. Since the manufacturers have a better understanding of the product, they must spread the awareness among the consumers to build the market. The producers need to strengthen their market position with a continuous development of products and innovation to sustain in the market. This can be achieved through continuous R&D and widen the presence globally across every developing and developed countries.

Commercial insulation sales are mainly affected by the fluctuating price of raw material due to high dependability on mining and petroleum-based raw materials. Aluminum is a prominent raw material, which is extracted from aluminum ore (bauxite). In line with the global trend of sustainability in the chemical industry, commercial insulation manufacturers should focus more on incorporating environment-friendly and energy-efficient products to their portfolio.

So, what may restrain the Commercial Insulation Market?

Commercial insulation market is less aware of most of the developing markets, which restraint it with the unavailability of labors. Also, the high rate of per square feet cost in a commercial buildings affects the commercial insulation market to sustain in most of the developing countries.

Recent Trends in Commercial Insulation

A huge consumption of energy in the buildings, produces carbon emission. However, recently developed advanced technologies have reduced the energy emission rate by using advanced insulation material in commercial applications, such as hospitals, offices, airports, institutes, and general commercial buildings. It has been projected by the European Environment Agency (EEA) that Europe has potential to save up to 28% of energy from the commercial building by 2020 with the installation of smart insulated HVAC’s. Increasing investments in the energy-efficient and environment-friendly commercial insulation product development is a prominent trend prevailing in the global commercial insulation market.