JEC's 2023 latest report

According to the latest JEC Watch 2022-2027 report, the global market is estimated at 12.7 million tonnes (composite materials used to produce composite components) by the end of 2022. It represents the $41 billion composite materials market and the corresponding $105 billion composite component assembly market.

Asia still leads, but shows signs of slowing

Asia will continue to lead the way with a compound annual growth rate (CAGR) of 4% in the coming years, followed by North America (3%-4%) and Europe (1%-2%). The region is the largest market, accounting for 47 percent of the global market. In Asia, the global composites market will climb to 7.3 million tonnes by 2027, of which electrical and electronics (E&E) is expected to account for the majority (1.8 million tonnes).

Despite the slowdown, China should continue to be a strong driver of the global composites industry. For example, demand for electronics (digitization, remote work/learning, etc.) is expected to continue to grow in China and other Asian countries.

China is already the world's largest wind energy market, accounting for 48 per cent of the global market. Still, wind will account for less than 8 percent of China's energy output in 2021.

China will add about 30 gigawatts of new capacity a year, or about half of the new capacity. By 2050, the installed capacity could reach 1TW, accounting for about 26 percent of the total power capacity. Generally speaking, construction should slow in Asia due to China's economic slowdown and its impact on the financial and real estate sectors.

After a strong compound annual growth rate (11%) between 2010 and 2019, the aerospace industry has yet to fully recover from the pandemic. Still, it should grow at a compound annual rate of 8% over the next four years. China's first domestically built narrow-body passenger jet, the C919, was delivered to China Eastern Airlines in Shanghai late last year and is expected to enter commercial service this spring. The amount of composite material reached 11.5% of the structural weight of the fuselage.

Transportation and Construction: Growth Drivers in the North American Composites Market

According to the International Monetary Fund, the North American economy will grow at 2 per cent a year for the next few years, while the future growth rate for composites should be around 3 to 4 per cent a year.

North America and China should be strong drivers for the global composites industry. There is still potential for further penetration in the construction sector (major maintenance and development of infrastructure such as Bridges, renovations, etc.) however, there is potential risk in the new construction/equipment segment given the macroeconomic backdrop.

According to JEC Observer, the global composites market in the North American region (Marine, aerospace, consumer goods, electronics and electrical, energy, construction and transportation) will climb to 4 million tons by 2027, with construction and transportation accounting for 1.3 million tons and 1.1 million tons respectively.

In the United States, rapidly rising mortgage rates have put pressure on home prices across the country. However, the North American construction industry will remain a major contributor to the composites industry, with a market share of about 20 per cent, driven by a massive investment programme in infrastructure construction and refurbishment (Bridges, water supply networks).

North American aerospace companies were hit hard by the pandemic (with a compound annual growth rate of -10% over the 2019-2022 period), but seem certain to recover faster than their European counterparts, even though the aerospace industry was in disarray before 2020 and annual aircraft deliveries also fell sharply in 2019 due to problems with Boeing 737-MAX.

Transportation leads the development of the European composite industry

For Europe, financial institutions forecast a lower growth rate of 0-1% per year, as has been observed over the past few years. However, it is still very encouraging that the EMEA region and the Americas together account for 63% of the global composite market value.

The dynamics in Europe remain heterogeneous among different European countries, with growth difficulties in general (access to competitive energy, the war in Ukraine and its associated consequences, etc.). We are very focused on transportation, and composites can play a role in lightweight (rail industry, smaller/lighter cars, hydrogen heavy traffic, etc.).

In the transportation sector, composites are undeniably important for new types of vehicles (hybrids and EVs, where lighter construction can compensate for heavier batteries). For example, composites make up about 16 percent of consumer sporting goods (bicycles).

Construction: A resilient market

By 2022, the building composites market will account for 19% of the global composites market by value (26% by volume). The industry was hit hard by the Covid-19 pandemic in 2020, but quickly recovered to structural levels. As a result, the construction component of composite materials is expected to grow at a limited rate of 2 percent per year over the next five years, provided no major crises occur during this period. During the economic crisis, infrastructure and renovation or maintenance are more resilient market drivers than new construction.

While composite projects are much more expensive, they have become more competitive as steel, concrete and wood prices have risen. In addition, the much lighter weight and subsequent need for less foundation work makes the composite construction better for the environment and reduces the costs associated with Labour and plant (machinery) hire.

The poor health of infrastructure is expected to attract more and more investment to the United States, which could drive the market. Fiber reinforced polymer (FRP) bars may replace steel bars and thus pose a threat to steel products. FRP bars are light in weight and high in tensile strength. These products can be replaced with FRP bars, as they last longer and the cost of metalworking will increase in the coming years.

In the European area, there has been much work on advance recommendations for the use of these reinforcement materials in reinforced concrete (February 2007; CNR-DT, 2007) and International Dimensions (ACI, 2003; Can/CSA, 2002). European regulations are also looking at the combined use of these strengthening materials.

In Europe, the water supply networks in Italy and Eastern Europe (Italy, Bulgaria, Romania) will present significant opportunities for composite pipe manufacturers in the coming years. Leakage rates in these networks range from 70,000 km (Bulgaria) to 480,000 km (Italy), and from 40 per cent (Italy) to 60 per cent (Bulgaria). As a result, a lot of restoration work is likely to be needed in the coming years.

Source: China Composite Materials Industry Association