Cladding Market

Market Overview

The global cladding market size valued at USD 245.07 billion in 2022. It is estimated to reach USD 424.71 billion by 2031, growing at a CAGR of 6.3% during the forecast period (2023–2031). The growth of the construction industry and favorable government regulations promote market growth. Government efforts, foreign direct investments, and robust economic growth will likely fuel significant expansion in the Asia-Pacific construction market in the coming ten years.

Cladding is a covering affixed to the exterior of a building or other structure and can serve a functional or aesthetic purpose. It adds to the structure's visual appeal, acts as insulation, and shields the underlying structure from the effects of the environment, all of which are advantageous. There is a wide variety of viable cladding materials, and the choice of one is determined by factors including durability, weather resistance, required maintenance, and architectural design. Common cladding materials include wood, brick, vinyl, fiber cement, and composite materials. Metals (such as aluminum or steel) are frequently used as cladding materials. The typical configuration of the cladding system includes an outer shell, an insulation layer, and a structural backing. The exterior skin of the building is the layer that is visible and is in charge of giving the structure its desired appearance.

In contrast, the insulation layer aids in controlling heat transmission and boosts energy efficiency. For the cladding system to effectively do its task, it needs support and stability from the structural backing. A range of techniques, including adhesive bonding, mechanical fixing, and interlocking systems, can be used to erect cladding systems.

Market Dynamics

Cladding Market Drivers

Growth of the Construction Industry

With increased construction spending in developing nations and the economies of the Asia Pacific, the global construction market is anticipated to expand steadily. Strong industrial and economic development, population increases, and public infrastructure investments by the government are all credited with this growth. In the Philippines and Malaysia, rapid urbanization, expanding populations, and robust economic growth are anticipated to create profitable growth opportunities for the building industry.

Construction is expected to increase the fastest in South Korea, thanks to governmental and private expenditures on business and industrial projects. Due to the government's agenda for economic development, Malaysia's residential construction industry is anticipated to increase significantly. Over the forecast period, the demand for flooring and ceramic tiles is anticipated to be driven by the expansion of the building sector in the Asia Pacific.

Favorable Government Regulations

Cladding systems are anticipated to acquire global acceptance due to their lightweight, thermal insulation, enhanced external appearance, and acoustic performance advantages. Citizens of the United States may claim the Residential Energy Efficiency Property Credit for solar, wind, and geothermal equipment installed in both primary and secondary residences. Cladding systems save energy, increase the structure's durability, and reduce weight. Using lightweight materials guarantees minimal additional weight and facilitates the removal of exterior leaves. Government regulations and environmental consciousness are driving the increasing demand for energy-efficient buildings.

Cladding inhibits thermal bridging, thereby improving energy efficiency and reducing operating costs. The World Green Building Council and the International Energy Agency are key organizations working on green building concepts and advising builders on energy-efficient building practices. Cladding adds another layer to the building, enhancing its acoustic performance and preserving environmental equilibrium. It also facilitates the modernization of existing properties and ensures that new structures complement their surroundings. Renovating a structure with cladding enhances its thermal and acoustic performance, extending its lifespan. Market drivers are increasing awareness about energy-efficient buildings and protection from rain and wind.

Cladding Market Restraint

High Initial Installation and Maintenance costs

The global cladding market is anticipated to be negatively impacted by high initial installation costs and maintenance concerns. The propensity to conceal primary flashing elements behind cladding components restricts the ability to perform routine maintenance or evaluate the performance of the materials without removing panels. Failure is possible if the structural components are not routinely inspected and maintained. Regular inspections of the sealant junctions are required to maintain the system's outer panels and seal between the air and water barriers.

The cladding components of typical open-joint systems benefit from the ventilation produced by the open joints between panels, exposing the same components to exterior conditions and creating inherent performance concerns. This exposes the cladding components, air and water barriers, and any flashing materials to their maximum design pressures.

Cladding Market Opportunities

Population and Urbanization increase in Emerging Economies

Some of the most important reasons that have contributed to the expansion of the world's population over the past several decades include a steep fall in the mortality rate, improved access to healthcare, higher levels of disposable income, and improved sanitation infrastructure. Over the next five years, the growing population is anticipated to drive demand for residential and non-residential buildings, which, in turn, will cause an increase in the need for cladding systems.

The growing urbanization occurring in emerging economies such as India, China, and Brazil will be a driving force behind the growth of the cladding systems market. Industrialization, higher income levels, a growing population of middle-class individuals, and overall economic expansion will drive investments in residential and non-residential construction activities. In addition, due to ongoing urbanization, an increasing number of people will relocate to cities, creating a need for housing in such locations. Cladding systems continue to drive growth in the market for cladding systems.

Regional Analysis

North America Dominates the Global Market

Based on region, the global cladding market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global cladding market shareholder and is estimated to exhibit a CAGR of 15.2% over the forecast period. North America's cladding market is expected to grow significantly over the forecast period due to increasing demand from the residential sector, manufacturing industries, and institutions. The US dominates the market, with the US dominating consumption. The manufacturing industry will benefit from new policy reforms, boosting industrial construction and driving cladding demand. The growing international and domestic migration rate is expected to boost housing demand, propelling residential construction. The market is expected to witness substantial growth in single-family housing, with multi-family construction expected to decline.

Additionally, the market is expected to see moderate growth in institutional construction activities. Furthermore, increasing product demand from the commercial sector, such as retail chains, shopping malls, and supermarkets, is expected to fuel market growth in the coming years.

Europe is anticipated to exhibit a CAGR of 13.4% over the forecast period. The cladding market in Europe is expected to benefit from the recovery in the residential and commercial construction sectors. The growth in construction activities and increased demand for cladding drive the market, driven by factors like the growing residential sector and the rise of the tourism industry. Factors like the growth of the tourism industry, retail trade, and business turnover in 28 EU states also drive commercial construction.

Furthermore, the cladding market has experienced weak growth due to the COVID-19 crisis but is expected to experience moderate growth in the coming years. Innovative claddings, such as anti-bacterial tiles and fiber-reinforced ceramics, are being developed for household and hospital applications. The growing geriatric population in Europe is driving investments in healthcare establishments, driving demand for ceramic wall cladding. The demand for claddings is expected to increase due to improved thermal and acoustic properties and weight reduction. Italy, Germany, and the UK are major cladding markets in Europe.

The Asia-Pacific cladding market is expected to experience the fastest growth in the forecast period due to the massive potential of the construction industry in the region. The region's economies are expected to flourish due to massive investments in public infrastructure and the expansion of the residential construction sector. Green building codes enforced by regional governments are also expected to aid market growth. The region's high temperature and extreme climatic conditions drive the demand for exterior protection of structures, which are used for barrier protection and energy efficiency. However, low product penetration due to a lack of awareness may hamper market growth. The expansion of residential, commercial, and industrial sectors due to sustainable economic growth is expected to boost construction activities, driving product demand.

In Latin America, the construction industry is expected to experience substantial growth due to investments in infrastructure projects by foreign and domestic private players. The region's economies, including Argentina, Brazil, Chile, Colombia, Mexico, and Peru, contribute significantly to the growth. Economic conditions are expected to improve due to investments in infrastructure, commercial and industrial projects, nuclear energy, and renewable energy. The growth in the construction sector is attributed to private capital infrastructure developments, public-private partnerships, and increasing per capita income. The Mexican government's programs, such as the National Infrastructure Program and the National Housing Commission, are expected to impact the construction sector positively.

In the Middle East and Africa, the demand for cladding is expected to increase due to increased product adoption and advanced construction technologies. The construction sector is expected to experience rebound growth due to investments, oil production expansion, and improved weather conditions. The residential construction sector is expected to drive increased demand for cladding. Government investment in regional economies like Saudi Arabia, the UAE, and Qatar is expected to boost economic growth, driving the demand for cladding. The cladding market is expected to experience moderate growth, with the recovery of oil prices reducing government spending on infrastructure projects. Additionally, a significant consumer base is expected to benefit the market.

Segmental Analysis

The global cladding market is bifurcated into material and application.

Based on the material, the global cladding market is bifurcated into steel, aluminum, composite materials, fiber cement, terracotta, ceramic, and others. 

The terracotta segment dominates the global market and is predicted to exhibit a CAGR of 7.1% during the forecast period. Due to their UV resistance, weatherproof and fireproof properties, and ease of installation, terracotta panels are predicted to experience a significant increase in demand. Terracotta is a natural material comprising clay particles processed with fire and water. Terracotta claddings are used to construct panel designs with other materials such as glass, stone surfaces, and paint. Similar to exposed brickwork, terracotta cladding can provide a smooth appearance. These panels are available in various colors, shapes, and sizes and can be glazed or unglazed.

Terracotta panels provide continuous insulation outside the primary wall to increase a building's thermal performance. These panels are mortar-free and impermeable, which reduces maintenance costs over the lifetime of the building. Due to its durability, resistance to ultraviolet radiation, recyclability, fast, simple installation, and impermeable and fireproof properties, the demand for terracotta cladding is expected to increase rapidly in the construction industry. The average thickness of terracotta claddings ranges between 18 mm and 30 mm; the dimensions of these claddings can differ according to the needs of the cladding structure.

Based on application, the global cladding market is bifurcated into residential, industrial, commercial, offices, and institutional. 

The office segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 6.8% over the forecast period. Office construction is the largest consumer of cladding systems. The office construction segment has the largest market share for cladding applications and is the primary demand driver for cladding systems. The segment consists of office spaces, including government and private offices. These constructions utilize claddings for weather resistance, thermal insulation, fire resistance, and aesthetic appeal. Increasing employment rates and regional expansion of existing companies drive the demand for new office spaces, leading to increased global construction activity.

These factors are anticipated to increase demand for cladding in the office construction industry. Increasing expenditures on renovating older office structures are anticipated to boost demand for cladding. The demand for cladding systems that provide acoustic and thermal insulation is anticipated to be fuelled by a rising concern for the security of building structures and employees. The cladding systems used for office applications are highly insulated and constructed with fire-resistant panels. Panels made of fiber cement, terracotta, and ceramics are commonly used for these structures.

Recent Developments

• May 2023: Britten Inc., a leading developer of print and design solutions, has announced the advent of Tex CladcTM, which blends high-strength engineered fabrics fastened with architecture-grade metal. These elements provide a revolutionary exterior cladding system that offers a cost-effective alternative to traditional perforated metal facades and a dynamic platform for inventive architectural solutions.

• March 2023: Cuppa Pizarras, an architectural cladding firm, has developed Cupa Clad, a slate cladding system designed to display the material's aesthetic beauty while boosting a building's insulation. Cupa Pizarras coupled natural slate with a rainscreen application process in which the cladding is affixed to the outside of the building envelope with a ventilated space in between to produce the cladding system.