The global construction aggregates market is expected to register annual growth of 6.5% a year to reach a value of US$642.15bn by 2027, according to a new study by leading business market research consultancy, Coherent Market Insights (CMI).
The Infrastructure segment held the largest market share (38.3%) of the global construction aggregates market in 2018, states CMI’s report titled Construction Aggregates Market – Global Industry Insights, Trends & Opportunity (2019-2027). It is expected to retain its dominance over the 2019-2027 forecast period thanks, CMI notes, to a worldwide increase infrastructure works.
Asia Pacific held the largest regional share (48.2%) of the global construction aggregates market in 2018. The region’s sales were valued at US$179.85bn in 2018 with CMI citing China, India and Malaysia as the major growth engines. According to the U.S. International Trade Administration, China’s overall construction industry was valued at US$782.61bn in 2017 and is expected to reach US$1,042.17bn in 2021. Increasing construction activities in the Middle East are also expected to enhance the overall Asia Pacific construction aggregates market growth over the forecast period.
The new CMI study notes that North America witnessed significant growth in its construction aggregates market in 2018. According to the
The European construction aggregates market is said by CMI to be largely driven by Germany, France and the UK. The constant effort from the region’s governments to go green is one of the major factors driving growth of this market. For instance, the Waste Framework Directive (WFD) has set a target of recycling 70% of construction, demolition, and excavation wastes across Europe by 2020.
Middle East and Africa are among the fastest growing regions in the global construction aggregates market, according to CMI. Dubai, in the United Arab Emirates, will be hosting the World Expo 2020 at the Jebel Ali arena, with US$2bn-$4bn being spent on primary infrastructure for the major global event. The amount being spent on secondary infrastructure is valued in the CMI report at US$8bn. This includes construction projects in the hospitality, transport, commercial and retail sectors. The 2022 FIFA World Cup in Qatar is also expected to boost the infrastructure and enhance growth of the Middle East construction aggregates market.
Nigeria is often highlighted as one of the most attractive markets in Africa for construction projects. In West Africa, around US$120bn has been spent on infrastructure across 92 projects, of which 61% is earmarked for plans in Nigeria, whose 186 million inhabitants make it Africa’s most populous country. CMI notes that Nigeria currently has 68 major building projects generating a total capital expenditure of around US$73bn. This, CMI forecasts, will boost overall African construction aggregates market growth.
CMI notes that growing infrastructure and residential sectors are expected to drive growth of the global construction aggregates market over the 2019-2027 period. For instance, Foreign Direct Investment (FDI) received in Construction Development sector (townships, housing, built up infrastructure and construction development projects) from April 2000 to June 2018 stood at US$24.87bn, according to the Department of Industrial Policy and Promotion (DIPP). Meanwhile, the logistics sector in India is said by CMI to be growing at a CAGR (compound annual growth rate) of 10.5% annually - expected to reach US$215bn in 2020.
According to the UK Government Construction Strategy 2016-2025, infrastructure projects worth US$228bn are set to be carried out across the UK by 2025.
CMI states that rising use globally of recycled construction aggregates due to the inability to preserve depleting energy resources and reduce costs will positively impact construction aggregates market demand.
However, the new CMI report warns that rising energy and high transport costs are hindering global construction aggregates market growth. It cites the example of a pit where the sand and gravel might be valued US$7/tonne, but whose operators need to fork out US$7/tonne to transport orders 35 kilometres to the buyer’s job site. This leads to the customer being charge US$14/tonne for their sand and gravel.
The latest CMI study also analyses the competitive landscape of the global construction aggregates market, highlighting several major acquisitions and mergers over the last year.
In February 2019,
In November 2018, Natural Resource Partners (NRP) announced that NRP has signed a definitive agreement to sell its construction aggregates business segment, Vanta Core Partners, to an affiliate of Sun Capital Partners for US$205mn.
Finally, in April 2018,
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