Increasing Infrastructure Investments in Developing Economies to Boost Market Growth
Growth of the construction aggregates market is predominantly driven by the development of large-scale infrastructural projects in developing economies of Asia Pacific as well as North America and Europe. Governments of major economies are focusing on the development of transportation facilities and strengthening their energy (power generation) infrastructure.
Several infrastructural projects, such as construction of light rail corridors, office buildings and shopping centers, are underway in North America.
- Approximately 130 new oil & gas production facilities are expected to enter operation across the APAC region by 2025. India will account for the most with 62 projects, followed by China with 20. Indonesia, Vietnam and Malaysia are expected to each develop 10 to 15 projects.
- According to the International Renewable Energy Agency’s Renewable Capacity Statistics 2018, Asia accounted for nearly two-thirds of the world’s new renewable capacity in 2017. The region was also the fastest-growing area, achieving growth of 13 per cent.
Rising Residential Projects to Drive Growth of Construction Aggregates Market
Housing recovery and on-going residential projects are estimated to drive the residential construction sector growth. This in turn, is expected to propel the demand for construction aggregates in the U.S. during the forecast period. In the past years, demand for housing has significantly outstripped supply in some areas of the country. In 2019, it is estimated that more than 1,368,800 housing units were authorized by building permits. There is an increase of 3.9% above the 2018 figure of 1,317,900. This gap has pushed up home prices and rents, a trend that will continue in the future in the absence of any imminent policy changes.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the following new residential construction statistics for May 2019, which includes 1,269,000 housing starts and 1,213,000 housing completions. The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced following new residential construction statistics for May 2019 building permits: 1,168,000, housing starts: 1,289,800, housing completions: 1,250,600.
Innovation in Production Technologies to Offer Lucrative Growth Opportunities
Innovation in technologies required for the production of construction aggregates has led to increased efficiency of manufacturing processes, leading to significant productivity as well as high quality of products. Also, numerous manufacturers present in the value chain are strengthening their R&D infrastructure to invent new production technologies. This in turn, is fueling the growth of the global construction aggregates market.
- Haver & Boecker’s ‘ Hydro-Clean’ washing unit cleans toxic materials from aggregates and reduces water consumption by around 75% in comparison to other conventional log washers.
- In October 2019, Metso launched a new Nordtrack mobile crushing and screening product range. This mobile plant can be easily meet the needs of general contractors, move between different operating sites, saving time needed for setting up a new crusher plant and in turn, improving productivity.
- In 2018, Maine & Company developed a revolutionary automated process for testing the overall composition of aggregates. The particular process is being implemented in the heavy construction industry.
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Stringent Zoning Regulations and Rising Energy Costs to Hamper Market Growth
Securing permission for mining involves adhering to environmental laws, land development laws and zoning laws, among others. Moreover, restrictions on the development of new mining sites in certain countries have been implemented over the recent past. For instance, California has 74 Bn MT of reserves in government-approved mining land. However, mining is permitted in only 6%-8% of the total land.
Aggregates manufacturing companies are adversely affected by rising energy costs in the following manner:
- First, to mine and produce aggregates, companies require fuels such as natural gas, diesel, petroleum coke and coal. Any increase in fuel cost could adversely impact companies’ production.
- Second, irrespective of construction aggregates are transported by railways, truck or barge, an increase in energy prices, in turn, can lead to an increase in the cost of shipments.
- The global construction aggregates market is a highly fragmented market, owing to the presence of significant number of players in the global market.
- Key players in the construction aggregates market are in the quest of adopting emerging business model such as collaboration with the small players in order to maintain their dominance. Also, these players are having a tight eye on potential prospecting quarries in order to increase production.
- Some of the leading players such as Heidelberg Cement AG, Martin Marietta Materials Inc, LSR Group, LafargeHolcim Ltd, Cemex SAB de CV ADR, Vulcan Materials Company, CRH plc are utilizing widespread resources on innovational and developmental activities to deliver essential products and solutions to global customers, purposely strengthening their brand image along with setting new benchmarks for the global market.
Construction Aggregates Market: Taxonomy
- Crushed Stone
- North & Central America
- South America
- Australia & New Zealand
- Middle East
- Rest of APAC
- Southern & Western Europe
- CIS & Eastern Europe
- Northern Europe