Neoprene Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

Key Highlights

• Over the short term, increasing demand for neoprene from the electrical and electronics industry for application in wire and cables is expected to drive the market's growth.
• On the flip side, the availability of substitutes like thermoplastic and polyurethane elastomers in neoprene applications is hindering the market's growth.
• The augmenting popularity of neoprene gloves will likely act as an opportunity for the neoprene market.
• Asia-Pacific dominated the market across the world with the largest consumption in the countries such as India, China, etc.

Neoprene Market Trends

Increasing Demand from Building and Construction Industry

• The neoprene market is large and diverse, with many applications in building and construction. In terms of neoprene consumption, the building and construction market is one of the fastest-growing end-use industries. Neoprene proved its performance in a variety of structural sealing and waterproofing applications.
• Neoprene is commonly used to seal floors of multi-story structures, prevent roof leaks, protect specialty windows from winds and shocks, and sheathe bridge-bearing pads and cables. Because of its great flexibility, neoprene is a popular material for structural engineering projects requiring unique parts with exceptional weather-, water-, chemical-, and fire-resistance qualities.
• Neoprene is resistant to grease, wax, and oil and highly resistant to diluting acids, bases, and salt solutions. Another chief advantage of neoprene is that it maintains high performance at a range of temperatures, ranging from -20°C (-4ºF) to 95°C (203ºF), and can even be compounded for more extreme temperatures. These advantages make neoprene one of the most attractive solutions in building and construction applications.
• According to the United Census Bureau, the total spending in the construction sector during December 2022 in the US was USD 1,809.8 billion. The construction sector saw an increase of about 7.7% in December compared to December 2021 on a year-on-year basis, in which the total spending was USD 1,681.0 billion. It, in turn, would have assisted in expanding the neoprene market.
• Eurostat, in its report, also stated that construction in housing accounted for about 5.6% of the EU GDP in 2021. This proportion varied across the EU, ranging from 7.6% in Cyprus to 7.2% in Germany and Finland, to 1.3% in Greece, 2.1% in Ireland, 2.2% in Latvia, and 2.3% in Poland.
• Germany is Europe’s biggest construction market, with the continent’s largest building stock. The German government set affordable housing as one of the major objectives for the country. The government plans to build 400,000 new housing units every year, 100,000 of which are publicly subsidized.
• This investment growth led to an increase in construction activities, leading to an expected increase in the demand for acrylate monomers over the forecast period.

Asia-Pacific is Expected to Dominate the Market

• Asia-Pacific is expected to dominate the market due to increasing demand from the construction, automotive, and electrical industries in countries such as China and India.
• China's total automobile production and sales volume is the first in the world for 14 consecutive years. In 2022, the production and sales of automobiles were 27.021 million and 26.864 million, up 3.4% and 2.1% year on year, respectively.
• The Japan Electronics and Information Technology Industries Association (JEITA) estimated the overall production value of the electronics sector in Japan to be around JPY 10.1 trillion (84.5 USD billion) as of November 2022, roughly 100.7% of the value from the previous year. Compared to the prior year, electronics exports from Japan also increased by almost 15% up until November compared to the previous year.
• According to the IBEF report, the Indian automotive industry is expected to reach USD 300 billion by 2026. In October 2022, the total production of passenger vehicles, three-wheelers, two-wheelers, and quadricycles was 2,191,090.
• In its annual report for 2022, the Philippine Statistics Authority also stated that motor cars and motorbike maintenance contributed significantly to the country's 7.6% GDP growth over the previous year. The sector was the most important contributor, providing approximately 8.7% of overall growth.
• The electronics industry is one of the key consumers of neoprene. Electronic products, such as smartphones, OLED TVs, and tablets, have the highest growth in the consumer electronics segment in China. With the increase in the disposable income of the middle-class population and cheap labor availability, the domestic production of electronic products is projected to grow rapidly shortly, thereby driving the neoprene market.
• Therefore, the above factors are expected to significantly impact the market in the coming years.

Neoprene Market Competitor Analysis

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