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%).

31/10/2018

Copyright: Interconnection, Publication free of charge for coverage regarding the study and InterConnection Consulting.