Cleveland-based researchers, The Freedonia Group, are predicting that U.S. asphalt demand will exceed 37 million tons in 2007. That figure represents increased demand of 1.5% per year through 2007. The value of asphalt-containing products is expected to reach $10.8 billion in that year.

Growth will proceed at similar paces in the two large asphalt-using markets: paving and roofing. The group expects paving to accelerate and roofing to decelerate.

One risk to the forecast is the eventual outcome of TEA-21 reauthorization. Concerns about homeland security and other federal budget priorities may limit potential increases in federal highway spending, constraining the market for asphalt, the group says. Asphalt cement will continue as the dominant asphalt-paving product. Continuing adoption of performance-based specifications for road projects will generate demand for polymer-modified asphalts.

Although asphalt roofing products accounted for only 14% of asphalt demand by weight, their value was just more than half the total. Demand for asphalt roofing products will benefit from resurgent construction activity in nonresidential markets, which will generate applications for modified bitumen and built-up roofing, the group says.

Gains in the residential segment will be muted, however, as conventional housing starts are expected to decline slightly from the high levels attained in the 1999-2002 period.

Freedonia says the nonresidential building market for asphalt will enjoy the best growth prospects during the forecast period as construction activity rebounds from 2002 levels particularly in the office, commercial and industrial segments. Nonbuilding construction will remain the largest market for asphalt products, although growth will be near the average for asphalt products overall.