Sales of construction aggregates in the United States are forecast to expand at a 2.9 percent annual pace through 2019 to 2.8 billion metric tons (Gt), continuing to recover from the steep declines that occurred as a result of the country's 2007-2009 economic recession and outperforming both its North American neighbors.
Consumption of aggregates was largely flat for most of the past five-year span and only began to recover in 2014. Gains were supported to a degree, however, by nonbuilding construction spending. These and other trends are presented in World Construction Aggregates, a new study from The Freedonia Group, a Cleveland-based industry research firm.
The U.S. has the highest usage rate of crushed stone of any country in the world, when measured as a percentage of total aggregates demand, accounting for 55 percent of sales in 2014, according to the study.
Demand gains for crushed stone and alternative aggregates such as recycled concrete, fly ash and slag, will be stimulated by healthy gains in all types of construction through much of the world. Residential building applications for aggregates will be fueled by upturns in the housing markets of developed countries and by rising personal incomes in developing countries, which will spur demand for more modern housing.
According to the study, sand and gravel reserves are shrinking across much of the world, and illegal sand mining plagues a number of developing markets that have rapidly growing sand consumption requirements. As efforts to curb illegal mining activities have been largely unsuccessful, sand and gravel reserves in many countries are expected to be depleted at a rapid pace through 2019.
This will result in price hikes, especially in urban centers where demand for aggregates is sizable, and will lead construction firms to turn to more favorably priced items. Alternative aggregates, in particular, are typically price-competitive with virgin aggregates since they are construction and industrial waste products that would otherwise be sent to a landfill.
Freedonia forecasts gains will be fastest in the Asia/Pacific region, with India, Indonesia, Vietnam and Malaysia recording the most rapid increases. Although growth in the Chinese market will slow going forward, China will remain by far the largest national consumer of aggregates in 2019.
The Africa/Mideast region will also record rapid growth, with all major national markets recording gains above the world average. In Central and South America, a number of government-backed affordable housing programs will help resuscitate the region’s residential construction industry and support aggregates market gains.
Hydraulic concrete will remain the largest application for construction aggregates through 2019. Sales in concrete applications will expand at an above average pace as well, fueled by gains in cement demand in all sectors of the construction industry. While growth will not be as sizable or rapid, demand in asphalt applications will represent an improved performance over the 2009-2014 period. This application will be bolstered primarily by an improved construction market in North America and Western Europe, where asphalt paving is most intensively used.