Commercial Insulation Market Demand
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The U.S. commercial insulation market reached $5.7 billion in net manufacturer revenue for 2022, growing 8.2% by volume mainly driven by commercial repair and remodeling (R&R) activity. Looking forward through 2025, commercial insulation demand is forecasted to decline 3.1% by volume. The volume growth seen over the last two years will be reversed to pre-pandemic levels, driven by the economic downturn and its effect on commercial construction.
Key drivers to impact commercial insulation demand through 2025 include:
High commercial R&R activity post-pandemic. The pandemic provided a boost to R&R commercial construction activity requiring building uses to evolve as consumer spending behavior changed. This evolution drove a significant amount of adaptive reuse and conversion projects for many commercial buildings. Aging commercial roofs were also a major contributor to R&R commercial activity impacting insulation demand for above roof decks.
Growing awareness of the importance of energy efficiency. A focus on the impact energy consumption has on the environment has led to implementing sustainable building practices like net-zero energy. Key to achieving net-zero goals is adopting more stringent energy codes, which have higher R-value requirements
Rising cost of energy in the U.S. As energy costs continue to rise, building owners and facility managers are seeking ways to reduce energy consumption and save money. Insulation is an effective way to do this, providing thermal insulation and reducing the amount of heat transfer between the building’s interior and exterior, which in turn reduces energy consumption
Repair and Remodeling Will Steer Demand
In 2022, over two-thirds of commercial insulation demand was from repair and remodel projects. Repair and remodeling demand is forecast to decline 5.9% by volume in 2023, with slight growth in 2024 and 2025. New construction is expected to decline over twice as much as R&R in 2023 with and even steeper decline in 2024, before beginning to recover in 2025..
Polyiso Remains Top Material Through 2025
Polyiso will retain its position as the leading product in commercial insulation with nearly half of the market’s value in 2025. However, the fastest-growing products will be open cell SPF and fiberglass loose fill, each with a minimal growth rate of 2% annually through 2025.