Increasing Infrastructure Spending And Rapid Urbanization Will Significantly Drive The Cement And Concrete Market
The global cement and concrete market was estimated at $483.1 billion in 2019, and is expected to grow to $652.7 billion in 2022 at an annual growth rate of 10.4%. Fast growth in the forecast period can be attributed to the increasing infrastructure spending, rapidly growing urban populations, and global economic growth.
Governments globally are increasingly spending on infrastructure projects, which are expected to stimulate the demand for cement and concrete products during the forecast period. Many countries are focusing on the renovation of old infrastructure to cater to the increasing populations. Canada, for instance, has announced infrastructure investments of more than $180 billion over a span of 12 years, of which $28.7 billion will be spent on public transit systems. Under Germany’s 2030 Federal Transport Infrastructure Plan, the government plans to invest $147.6 billion to build roads in the country. In February 2018, the US government announced a $1.5 trillion infrastructure plan to upgrade the country’s infrastructure, which includes $200 billion in federal funding.
The cement and concrete industry is significantly dependent on the housing, infrastructure, commercial construction and industrial sectors. According to Homebuilder’s index, housing accounts for about 60-65% of total cement demand in countries such as China and India. Furthermore, high demand from infrastructure projects such as freight, corridors, bridges, airports and ports, enhance the scale of economic activity, leading to a substantial increase in cement demand. A major portion of this demand comes from infrastructure projects funded by the governments. The commercial construction sector with high cement demand includes retail, office space, hotels and other civil structures such as hospitals, multiplexes and schools. Increasing infrastructure spending by governments is expected to drive the demand for cement, thus contributing to the growth of the market going forward.
Rapidly growing urban populations are also expected to drive the demand for cement and concrete products in the forecast period. A large number of people living in rural areas are migrating to urban areas in search of a better life. This is expected to increase the need for housing and infrastructure. Infrastructure demand is expected to increase significantly in Asian countries such as China, India, Vietnam and the Philippines. According to the 2018 World Urbanization Prospects Report by the United Nations, 55% of the world’s population lived in urban areas in 2018, and the rate is expected to rise to 68% by 2050. According to the World Bank, urban population in South Asia grew by 130 million between 2001 and 2011 and is expected to grow to 250 million by 2030.