According to the current analysis from Reports and Data, the global Cross Laminated Timber market was valued at $786.71 Million in 2019 and is expected to reach $2.3 billion by the year 2027, at a CAGR of 12.51%.
By volume, the market is expected to reach 3,237.61 thousand cubic meters in 2027 from 1,411.55 thousand cubic meters in 2019, growing at a CAGR of 11.23%. Rising awareness regarding sustainable architectural methods coupled with the rising number of cross-laminated timber producers and increasing interest in green homes are factors augmenting the market growth.
The move from concrete-based development to wood-based development alongside government initiatives to cut down on pollution emanating from construction activities around the globe are factors impacting the market. In addition to this, the steadily diminishing costs of CLT due to more suppliers and shorter total project development time is having a positive impact on the industry. Stringent government regulations regarding the use of timber for building homes (due to risk of fire) is expected to be a significant restraint to industry growth. However, certain unique benefits like the ability to better absorb seismic shocks than concrete structures are also a reason why builders are showing an interest in this material.
A report by the Institute of Civil Engineers (ICE), U.K., illustrates that the construction industry is likely to be one of the most dynamic industrial sectors in the next ten years from 2020 and the same will be witnessed in economies globally. The report illustrates that the volume for construction output will grow by 85% to over USD 15.5 Trillion globally by 2030, of which the three major countries China, the U.S. and India to account for over 57% of this growth. China`s share of the global construction industry will increase marginally as growth slows until 2030. Comparatively, U.S. construction will grow faster than China, growing by an average of over 5% per annum. The report estimates that India will overtake Japan to become the third-largest construction market by 2021.
The same report illustrates that apart from the top three countries, the extraordinary growth in the construction industry is witnessed in Indonesia, while Mexico is forecasted to overtake Brazil in the Latin America region. In the European region, until 2025, U.K. is a stand-out growth industry overtaking Germany to become the largest industry in the European region and the sixth-largest contributor by 2030. However, with the current pandemic situation the world is experiencing, the construction industry is a major industry that is taking a huge hit due to the policy of social distancing and many live projects being stalled currently or even canceled. Government stimulus actions can help the industry through initiatives like tax benefits or direct cash disbursals, thus making the situation a bit bearable in the short term. However, in the long term (over 3-4 years and more), the construction industry is expected to regain its momentum.
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The COVID-19 impact: The recent outbreak of COVID-19 disease caused by a novel strain of coronavirus has created certain unique upheavals in the construction industry, of which CLT (Cross Laminated Timber) is an emerging sector. According to the surveys and interviews which we conduct regularly, many manufacturers are pointing out a muted demand for real estate and building projects in the coming months, on account of the global economy stalling and massive disruptions in the supply chain. While China is slowly bringing facilities back online, the focus is shifting from an issue of supply (production) to demand as the broader, structural impact of the coronavirus outbreak widens. The key markets which are expected to witness tanking sales include China, Europe and North America, although virtually every territory faces the prospect of some degree of demand distortion in the coming months. Especially, like China, Rest of Asia-Pacific and North America function as the most important markets for the construction sector, supply chain disruptions and logistical challenges arising out of the virtual stalling of global trade are pointing to a grim future for this sector, at least for the next few quarters.
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