Demand for Gypsum Products to Increase

Demand for gypsum products in North America is expected to grow 1.6 percent per year through 2011 to 54.6 million metric tons, according to a market report by Cleveland-based research firm the Freedonia Group.

Gypsum board is the largest gypsum product segment, accounting for about 75 percent of demand, according to the report. Demand for gypsum board is projected to rise 1.4 percent per year through 2011.

Nonresidential building markets will offer the best opportunities for gypsum products over the forecast period, according to the Freedonia Group report. Gains are expected to be fueled by a rebound in the U.S. market and continued economic expansion in Mexico. Strength in the nonresidential building market will help offset weakness in residential construction, the largest individual market. A sluggish outlook for construction of new single-family housing in the U.S. and Canada will limit growth for gypsum products in residential construction.

The study’s findings report that in the Canadian and much larger U.S. markets, demand for gypsum board through 2011 will be tempered by a shard deceleration in the residential construction market, offset by a sharp acceleration in the nonresidential segment. As a result, the board types used more frequently in nonresidential applications will experience faster demand growth than gypsum board as a whole.

The smaller Mexican market will post faster growth of more than 4 percent per year. Gains in the Mexican market for gypsum board will benefit from government initiatives to relieve the nation’s housing deficit, as well as from further market penetration as construction methods amenable to gypsum board become more widely adopted.

Demand for gypsum as an additive to cement will advance at a rate of 2.6 percent per year through 2011, growing faster than other uncalcined products, such as agricultural gypsum and gypsum filler, according to the Freedonia Group report. Synthetic gypsum is expected to continue to supplant mined gypsum for use in calcined products. Synthetic gypsum accounted for 20 percent of gypsum demand in 2006, a substantial increase from its 7 percent share in 1996. This share is expected to rise to 28 percent by 2011.

The full study, “Gypsum Products in North America,” is available for purchase through the Freedonia Group at www.freedoniagroup.com.