Demand for building envelope products in North America is projected to decline at an annual average rate of 2.1% to $92.8 billion in 2027, according to a new study from The Freedonia Group.
The projection marks a reversal from the rapid growth for the product category in the five-year period from 2017 to 2022, due in large part to surging prices in 2021 and 2022. The Freedonia Group anticipates prices will moderate “significantly” from their peak in 2022, though they are expected to remain above pre-pandemic levels.
However, while market value is forecast to decline in the near term as prices moderate, growth in real terms for building envelope products will resume later in the forecast period due to expected rebounds in housing starts in the U.S. market.
The report, Building Envelope in North America, highlights how building envelope demand surged in the past two years as residential renovation and repair demand persisted throughout the COVID-19 pandemic. In particular, demand benefited from new housing construction in 2021 and from rising inflation in 2022. The report defines the building envelope as products or systems that help protect the outside of buildings, including roofing, sheathing, siding, windows, doors, insulation, air and water barriers, building wrap, flashing, and underlayment.
While most product segments within the building envelope category are projected to decline in volume in the near term, solar roofing was highlighted by The Freedonia Group as a category that is likely to experience strong demand growth. The Cleveland-based research group forecasts demand will be driven by current and future adoption of green building codes that encourage and incentivize the application of solar roofing products.
For example, California’s CALGreen building code is the first statewide building code in the U.S., and The Freedonia Group projects more states will follow suit in the forecast period. In California, nearly all newly built and substantially renovated structures will be required to meet net-zero energy criteria, incentivizing the use of solar roofing products that can help satisfy that energy standard.
According to The Freedonia Group, plastic products within the building envelope segment have experienced healthy growth in recent years due to advantages such as low cost, energy efficiency, ease of maintenance and installation, and lighter weight compared with other product materials. Metal has historically been the largest material category in the segment due its durability for window and door products, roofing panels, and siding in particular.
However, The Freedonia Group projects metal’s share will decline in the future due to competition with vinyl and plastic products. Wood building envelope products, such as windows and doors and shingle and shake siding, typically see lower usage on aggregate due to their relative cost and maintenance requirements compared with other materials.
While prices were impacted by supply chain issues in 2022, many of the challenges have eased this year, and The Freedonia Group forecasts a normalization in pricing for building envelope products. Through 2027, the average price of building envelope products is projected to decline at an annual rate of 2.5%. In general, average prices will be supported by manufacturers offering products with enhanced performance and aesthetic properties that justify higher price points, according to The Freedonia Group.
