The global Precast Concrete market size was valued at USD 107.06 billion in 2022 and is projected to reach a value of USD 180.88 billion by 2031, registering a CAGR of 6.0% during the forecast period 2023-2031.
Precast concrete is primarily used in the construction and building industry. It may be used for any kind of construction, viz., residential, non-residential, industrial, etc. Although precast concrete has several advantages in its use and applications, its cost still hampers the demand. The overall cost of having precast concrete, including machinery and molds needed for its production, is very high compared to traditional concrete. The increase in environment-friendly policies and the focus on green and energy-efficient buildings in the construction industry is driving the demand for precast concrete.
Due to rising investments in infrastructure development, the market is anticipated to be driven by the expanding construction industry across critical regions. The residential construction industry is anticipated to grow as disposable income levels rise in developed and developing nations. Additionally, rising government initiatives for the growth of their respective economies are anticipated to boost the construction sector and increase product demand in the years to come.
Gaining Prominence for Offsite Construction Alongside the Advantages of Precast Concrete Driving Market Growth
Offsite production, also known as prefabrication, is a process where the components of the civil structures are assembled at a production facility and then transported to the construction site. The precast structures are cast and hardened before being used for construction purposes. The said precast products are one the major components of the offsite construction. Offsite construction is one of the prominent sectors in the market as it is a time-saving option with minimal material wastage.
Also, another strong point regarding precast concrete is that the entire process for precast concrete can be carried out irrespective of the weather conditions. With the current environmental scenarios in the world, adopting environmentally sustainable and regulatory-compliant construction practices is likely to boost the revenues of the precast concrete sector in the coming future.
The advantages of precast concrete are the critical factors for prioritizing precast concrete over conventional concrete methods. The use of precast concrete in the infrastructure has several advantages over the on-site cast concrete. The most significant advantage is the superior quality of concrete, which results from the technical control of precast concrete production and the ideal factory conditions, which play a vital role in the efficient production of precast concrete. Another advantage it comes with is the speed of construction, as when used, it can save up to one-third of the total construction time required. Also, it does not consume more time to design the precast concrete than the masonry structure, as the precast structure can be easily replicated in the structure system. Considering all the factors about precast concrete, one of the most important is the cost incurred in using precast concrete, which is way less than conventional casting methods.
The two main factors fostering market growth are rapid urbanization and the exponential rise in population. The increased demand for non-residential establishments like airports, sports complexes, malls, and commercial spaces will significantly impact the supply chain because of the quicker and more cost-effective construction process. The demand for precast concrete will increase further due to the expanding population's rising need for residential space and the government's initiatives to provide housing for the Economically Weaker Section (EWS). Its use in offices and other commercial spaces has also increased due to increased urbanization activities brought on by the search for better career opportunities.
Even though precast concrete has several advantages over conventional concrete and casting methods, the one thing that can backfire for the precast concrete market is its costs. Precast concrete involves a lot of investment, as the costs for the machinery and the molds required for the production of the precast concrete products are way higher than the conventional concrete method.
The manufacturing of precast concrete products requires high-end technology with a highly-skilled labor force that can efficiently handle the production. Along with this, transportation costs also account for more significant expenses. The manufactured precast concrete needs to be transported from the manufacturing site to the construction site, which incurs a high amount of transportation costs concerning the location where it has to be delivered. So, all these factors are proving to be an obstacle to the growth of the precast concrete market, but engineers are working hard to lower these costs.
An essential component of concrete is cement. Cement production is one of the leading causes of global warming and other forms of pollution. Comp cement manufacturing facilities produce significant amounts of toxic gases like nitrogen oxide, sulfur dioxide, and carbon monoxide. These gases have been linked to illnesses like asthma, vision loss, and cardiovascular conditions. In addition, the effects of these gases on the environment include acid rain, lowered water quality, and global warming. The growth of the precast concrete market is likely to be constrained by the environmental and health issues associated with cement production. Further slowing the market's CAGR are government regulations that are in place to reduce emissions from cement manufacturing facilities.
As discussed above, precast concrete is easy to install and can easily be replicated in the masonry structure. The main factor that forces construction companies to utilize precast concrete is the speed and longevity of the precast concrete comes. With precast concrete's utilization, the construction's speed can be increased as it eliminates the time required for preparing the concrete mixture. With such a pace, the construction work can be completed within the stipulated time.
This is why many critical players in the global construction industry prefer precast concrete, which opens many opportunities for manufacturers and suppliers. The R&D going on to make the precast concrete comparatively less expensive can be a profitable opportunity for manufacturers, dealers & distributors of the precast concrete.
The global precast concrete market share is segmented by product and end-use. Based on product, the market is categorized into structural building components and transportation products.
Structural building components
The structural building components segment dominated the market with a CAGR of ~6% during the forecast period. The structural building components segment dominates the market owing to the need for speedy construction of buildings, including residential and commercial.
The speed of construction matters the most for the builders and the consumers who will use the constructed property. Precast concrete is used to replicate the masonry structure in big projects, which saves a lot of time and completes the entire building structure in less time than the conventional concrete casting method.
The next category in the said segmentation is transportation products, which is anticipated to grow at a CAGR of ~5%. The adoption of transportation products is estimated to grow over the forecast period with the increase in the construction of bridges, highways, railways, tunnels, flyovers, etc. The government spends a lot of money on developing all such transportation facilities. Apart from this, precast concrete is expected to gain high demand in rail applications owing to its advantages like high durability, low maintenance cost, and improved track elasticity.
The precast concrete market is classified into residential and commercial when segmented based on the end use.
The residential segment holds the top market to grow at a CAGR of 5%. The advent of residential projects at the current times is one of the critical factors for the growth of the precast concrete market.
The increasing number of residential projects on the outskirts of major cities is driving the market forward as people are looking for spacious homes nearby significant cities.
The commercial or non-residential segment is anticipated to grow at a CAGR of ~5% during the forecast period. The commercial projects include business zones, corporate offices, I.T. parks, industrial zones, shopping malls, supermarkets, hospitals, hotels, resorts, etc.
Covid-19 outburst stopped the entire construction work for almost a year, putting huge pressure on the construction giants and builders who invested huge amounts in their buildings and construction process. These include the costs incurred for the equipment and materials, labor costs, land acquisitions, other formalities, etc. Builders mostly invest money either by finances or the amount they get from their customers. The lockdown imposed and the complete shutdown of the work created huge debts for the builders and construction companies.
The precast concrete industry was not different from this, as it is a part of the construction industry. The precast concrete manufacturing sites were dragged to stoppage with no demand from the market. At that time, cost-cutting was the main thing to consider for builders, and precast concrete comes with higher costs, which affected the growth and earnings of the precast concrete market.
Many construction sites were stopped during the pandemic and never resumed even in the pre-pandemic times amid the losses and debts incurred. But still, the construction industry is one of those few industries that can never get obsolete, and this is why the industry is standing back taller and higher than earlier with the help of technology and fast-paced work methodologies with precast concrete.
Depending on the region, the market is analyzed in North America, Asia-Pacific, Europe, and LAMEA. Asia-Pacific dominates the market.
The Asia-Pacific region is the most dominant and is expected to grow at a CAGR of ~7%. The Asia-Pacific region is booming the said market segment with major emerging economies like India, China, and Japan. The countries' continuous development, which led to infrastructural developments, created a massive demand for such precast concrete materials to decrease the lead time and increase the construction speed with superior quality.
The second most dominant region is North America accounted the region is anticipated to grow at a CAGR of ~6%. North America has the presence of major developed countries like the U.S. and Canada that have significant demand for such construction methods.
Europe, the industrial hub in the world, has more commercial properties where precast concretes are used. According to the International Monetary Fund (IMF), the European economy is strengthening significantly, with the overall growth in GDP at 2.4%, which creates an ocean of opportunities for every sector, and precast concrete is one of those.
The least dominant region in the global precast concrete market is the Middle East & Africa region. The Middle East & Africa market was valued and expected to grow at a CAGR of 7%, owing to the revolutionary changes in the said region and other technological developments. Because there is such a high demand for residential construction, the market in Latin America will grow. Another element contributing to the expansion of the Latin American regional market is infrastructure development.
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