Demand for Gypsum Products to Increase

Demand for gypsum products in North America is expected to increase 1.7 percent per year through 2009 to 50 million metric tons, according to a report released by Cleveland-based market research firm the Freedonia Group.

Gypsum board is the dominant gypsum product sold in North America, accounting for nearly three-quarters of total tonnage in 2004. Demand for gypsum board is expected to advance 1.5 percent per year to 41 billion square feet by 2009, the Freedonia study predicts.

In addition to gypsum board, other gypsum products include building and industrial plasters, gypsum used as a cement additive, agricultural gypsum and gypsum fillers. Gypsum used as an additive for cement is expected to lead gains. Growth in cement markets will be supported by a rebound in nonresidential construction in the United States, as well as by continued efforts to rebuild infrastructure in Mexico.

Prospects for the North American gypsum industry are closely tied to the construction industry. According to the Freedonia study, the residential market plays a particularly important role, responsible for 60 percent of demand for gypsum products. Accordingly, the weak outlook through 2009 for the construction of new homes in the United States and Canada will result in a slowdown in demand for gypsum and gypsum products. The Freedonia study predicts that this deceleration will be offset somewhat by an upswing in new nonresidential construction spending.