The market for floor covering adhesives in Germany, Austria, and Switzerland is expected to grow by 2.2% in volume in 2018. The positive economic conditions and the construction boom are the basis for the moderate growth. According to a new study by Interconnection Consulting, average annual growth through 2021 is anticipated to be 1.7%.

A Few Hurdles

The moderate growth of the market does not quite reflect the current bullish construction sector. Alongside the positive economic figures, which are leading to a growth of the floor covering adhesive sector, a series of national and EU regulations are actually thwarting expansion. “The producers are being forced to find sustainable and durable adhesives,” explains Julia Tarasenko, author of the study. The total volume of the German-speaking market in 2017 was 123.8 million kilograms, for a market value of EUR 440.4 million.

Scant Vitality in Germany

At 85.2%, Germany easily captures the largest share of the market in the region. Interconnection forecasts a 1.7% average annual growth in volume through 2021. The marginal growth in Germany, which by no means reflects the positive economic trends, is due in part to expanding alternative markets, such as laminate flooring and ceramic tiles. The largest product group in Germany is dispersion adhesives with a 39.7% market share. The high demand is primarily due to the low cost and relative ease in cleaning. MS adhesives, with a market share of 35.1%, make up the second-largest product group. MS adhesives provide a high level of adhesive quality and bond quickly. Hardwood flooring, with a market share of 43.4%, is the principle market for flooring adhesives.

Austria the Growth Leader

The Austrian floor adhesive market has the strongest prospects for growth among the three countries analyzed. According to Interconnection, the market in Austria is on pace to grow at an average annual rate of 2.5% in volume through 2021, which corresponds to a growth rate in sales of 5.0%. The spike in new building construction lies at the root of the large potential for the flooring adhesive market. MS adhesives, at 49.1%, clearly dominate the product groups, followed far behind by dispersion adhesives at 30.0%. Hardwood flooring, at 50.1%, captures the lion’s share of the market, followed by PVC (26.0%).

Switzerland Benefiting from Interest Rates

Interconnection expects Switzerland to see an average annual growth rate of 1.7% through 2021. The negative interest rates set by the Swiss National Bank have made real estate as an asset class much more attractive, thereby increasing the demand for apartments, which, in turn, has led to an increase in both new developments and renovations. In Switzerland, MS adhesives, with a share of 49.5%, clearly dominate the market. Dispersion adhesives are a distant second at 25.8%. Hardwood flooring is the principle market (47.4%), followed by PVC/synthetic (29.6%).

Floor Covering Adhesives Benefiting from Booming Market

The market for floor covering adhesives in Europa rose last year by 4.6%. The strong showing in the markets analyzed (Germany, Austria, Switzerland, Italy, France, and the Benelux region) was largely the result of the positive economic climate and the booming construction sector. According to a new study by Interconnection Consulting, average annual growth is expected to be 3.2% through 2021.

Alongside the positive economic figures, which are leading to a growth of the floor covering adhesive sector, a series of national and EU regulations are actually thwarting expansion. “The producers are being forced to find sustainable and durable adhesives,” explains Julia Tarasenko, author of the study. Nonetheless, the markets are developing in lockstep with macroeconomic trends.

France Optimistic

This can be seen by the very optimistic situation in France, where average annual growth through 2021 is expected to reach 4.4%. Sales volume in 2017 grew 3.2%. MS adhesives are the largest product group in France, with a market share of 38.4%. At an average growth of 4.9%, this segment is also the market’s big hope. MS adhesives provide a high level of adhesive quality and bond quickly. Dispersion adhesives, with a market share in volume of 37.6%, rank just behind MS adhesives. The high demand is largely due to the low cost and the relative ease in cleaning. In France, hardwood flooring is the principle market (32.0%), followed by PVC/synthetic flooring (30.6%).

Moderate Growth in the Benelux Region and Italy

Compared to France, the Benelux countries are experiencing a somewhat slower-paced growth of 3.5% in value and 1.4% in sales volume. Dispersion and MS adhesives dictate the market here as well, though in the opposite order. Dispersion adhesives have a market share of 43.6%, followed by MS adhesives at 34.0%. The ranking of floor coverings is also in the opposite order. PVC is in first place with 33.6%, followed by hardwood at 32.6%. Italy grew by an exceptional 5.0% in value last year, though growth is expected to cool off sharply through 2021 according to Interconnection. In Italy, PU (polyurethane) adhesives are dominant. They are both strong and resilient and are largely used with wood flooring. This product group garners a market share in Italy of 45.4%, followed by MS adhesives at 27.4%. Hardwood flooring has 44.1% of the market in Italy, followed by PVC flooring at 36.3%. In the region of Germany, Austria, and Switzerland (please refer to a separate press release), last year’s growth reached 4.3% in value and 2.5% in volume.

The market for tile adhesives, fillers and floor compounds in Switzerland and Germany has continued to pick up rapidly due to the booming new construction sector. The market for tile adhesives is expected to increase by 7.6% this year, according to a new study by Interconnection Consulting.

Forecast is bright

Both in Switzerland and in Germany, construction activity in new buildings is steadily rising, which is also good for the industry. The total market volume in Germany and Switzerland amounts to 945.5 million euros. Overall, sales of tile adhesives will increase by 3.8% annually until 2021.

Switzerland and Germany with different conditions

In Switzerland, the sales of tile adhesives at 1.5% this year is still somewhat leisurely. In the following years, however, growth rates of around 4% are expected. The price war in Switzerland means that the appreciation of the market does not rise in the same proportion to sales. The appreciation of the Swiss franc and the high production costs as well as the high willingness to pay have made Switzerland a popular destination for importers. The situation is reversed in Germany. There, the sales of the industry increase disproportionately to the paragraphs. Interconnection expects sales growth of 8.2% this year. By 2021, sales in the sector are expected to increase by 7.1% annually.

Concentrated market

The product segment tile adhesives and natural stone adhesives accounts for a total of 54.8% of the total market. This is followed by joint mortar with 17.5%, soil masses with 17.3% and fillers with 10.4%. The market is very concentrated. In Switzerland, the proportion of top ten providers is 86.8% (as of 2016). In Germany, this share is 83.9%. The main companies are Mapei, PCI Ausburg, Quick Mix, Ardex, BASF, Knauf. Especially private labeling in DIY sales is becoming more and more popular. This is how OBI and other hardware stores sell their own brands.