Exterior Insulation and Finish System Market Trends [2031]

Report Description

Exterior Insulation and Finish System Market Outlook 2031

The global exterior insulation and finish system market size was USD 89.5 Billion in 2022 and is likely to reach USD 218 Billion by 2031, expanding at a CAGR of 16.25% during 2023–2031. The market growth is attributed to the increasing demand for energy-efficient buildings.

High demand for energy-efficient buildings presents significant opportunities for investments and innovation in the EIFS industry. Exterior insulation and finish systems (EIFS) align well with the growing emphasis on sustainability in the construction industry, with its ability to increase insulation and reduce energy consumption. It reduces the amount of energy that is required to heat or cool the building. Furthermore, the demand for sustainable buildings influences investment in the construction industry to develop sustainable building materials, which is anticipated to boost the market.

• In June 2022, Owens Corning acquired Natural Polymers, LLC, an innovative manufacturer of spray polyurethane foam insulation for construction and building applications. This acquisition expands the strategies of Owens Corning to strengthen core construction and building products.

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The market report finds that the COVID-19 pandemic hindered the exterior insulation and finish system market. Strict lockdowns and social distancing measures imposed by the government encouraged builders to cease or halt construction projects, thereby restraining the market. Furthermore, disruption of the supply chain and shutdown of businesses affected the market.

Exterior Insulation and Finish System Market Dynamics

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Major Drivers

Rising emphasis on the reduction of greenhouse gas emissions is projected to drive the EIFS market. Its energy-efficient properties contribute to reducing energy consumption in buildings, which helps in maintaining environmental sustainability. Several buildings have insufficient insulation and inefficient systems, which leads to high emissions and environmental impacts. However, EIFS plays an important role in modulating the environmental impact of the construction sector, as the focus on sustainability continues to grow.

Existing Restraints

The availability of sustainable alternatives to green insulation materials hampers the exterior insulation and finish systems market. Traditional materials such as glass wool, stone wool, plastic foam, and others. The green insulation material, known as hempcrete, is becoming increasingly popular among building engineers and professionals. Hempcrete is a mixture of hemp fiber and cement-like binders used to manufacture thermal insulation in buildings. Furthermore, key players are creating innovative building materials to address changing preferences in the green building materials landscape, which hinders the market.

Emerging Opportunities

Increasing product innovations is expected to create lucrative opportunities for the market players. Ongoing developments in building technologies and materials contribute to the growth of the market. For instance, in January 2023, Sto Corp. launched StoGuard Conformable Membrane, a self-adhered membrane that is used within StoGuard air and water-resistive barrier systems. The new membrane is used to seal dynamic joints, penetrations, substrate transitions, sheathing joints, and rough openings.

Scope of Exterior Insulation and Finish System Market Report

The market report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

Exterior Insulation and Finish System Market Segment Insights

Type Segment Analysis

Based on type, the exterior insulation and finish system market is divided into polymer-modified and polymer-based. The polymer-based segment is expected to expand at a significant pace during the projection period, as it offers improved performance as compared to traditional systems. The segment growth is further attributed to the increasing demand for exterior insulation, owing to their low cost, easy installation, and the availability of moisture content. The PB system has a 1/16-inch-thick strengthened base coat that is applied before the finish coat. PB systems provide improved durability, flexibility, and impact resistance which makes them suitable for several climatic conditions and reduces maintenance costs.

The polymer-modified segment is anticipated to hold a key share of the market in the coming years. Polymer-modified (PM) system is available in a 3/16-inch to 1/2-inch-thick reinforced base coat. This insulation consists of extruded expanded polystyrene (XPS) and is mechanically applied to cover the wall boards and wall structure.

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Component Segment Analysis

In terms of component, the global market is segregated into base coats, adhesives, finish coats, insulation boards, and reinforcement mesh. The base coats segment is projected to register a considerable CAGR during the forecast period. The base coats offer weather resistance and protection against moisture, ensuring the long-term performance of EIFS. It meets various project requirements and eco-friendly conditions with a wide range of formulation options and diverse properties, which boost the segment.

The insulation boards segment is anticipated to account for a major market share in the coming years, owing to the increasing demand for energy-efficient buildings. Insulation boards are made of expanded polystyrene and secured with an adhesive to the substrate. It reduces heat transfer through the walls, preventing energy loss, and minimizing thermal bridging. The increasing demand for insulation boards, owing to the energy efficiency regulations and sustainability concerns boosts the segment.

• In June 2023, Recticel launched a new range of polyurethane insulation boards, which contains 25% bio-circular raw materials, calculated by the Mass Balance principle. The new impact range decreases CO2 emission by an average of 43% as compared to a standard board, while offering equivalent technical high insulation performance.

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Insulation Material Segment Analysis

On the basis of insulation material, the exterior insulation and finish system market is segmented into mineral wool, expanded polystyrene, and others. The expanded polystyrene segment is expected to register a robust growth rate during the forecast period, owing to the high thermal insulation, low maintenance, efficient cost, water resistance, and reliability. Expanded polystyrene (EPS) insulation increases the overall energy efficiency of buildings by minimizing thermal bridging and heat loss or gain. Rising energy-efficient regulations and sustainability practices drive the demand for EPS insulation.

• In September 2023, Sto Crop. introduced Sto GPS Board, a graphite-enhanced, 100% closed-cell expanded polystyrene insulation board that is used in a variety of applications, including StoTherm ci GPS wall system and improved StoThermi ci MVES and StoPowerwall ci systems.

The mineral wool segment is projected to hold a large market share in the coming years. Widespread applications of mineral wool across several industries, transportation, and building sectors for its acoustic, thermal, and fire-protection properties. Mineral wools are gaining popularity, owing to their excellent fire-resistant qualities and ability to mitigate fire-related risks, thereby fueling the segment.

Thickness Segment Analysis

Based on thickness, the global market is segregated into 1 to 3 inches, 3 to 6 inches, and more than 6 inches. The 1 to 3 inches segment is expected to expand at a considerable CAGR during the projection period, owing to its optimal balance between structural and insulation support, which makes it a preferred choice for contractors and builders. It enhances energy efficiency and effective thermal insulation properties in several commercial and residential applications.

End-user Segment Analysis

On the basis of end-user, the global exterior insulation and finish system market is divided into residential and non-residential. The non-residential segment is anticipated to account for a major market share in the coming years, owing to the rising spending on institutional and commercial construction and increasing government concerns toward building projects. The segment growth is further attributed to the rising green building norms, increasing housing renovation & remodeling activities, and growing focus on energy-efficient buildings in developed countries. EFIS acts as a protective barrier against moisture, thermal bridging, and air infiltration, which enhances the overall performance of the building in non-residential structures.

Regional Analysis

In terms of region, the global exterior insulation and finish system market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the market during the projection period, owing to the increasing government initiatives for reducing greenhouse gas emissions and growing investment in infrastructure development. Increasing focus on sustainability and energy efficiency aligns with the high demand for environmentally friendly building solutions, which increases the demand for the market.

The market in North America is anticipated to expand at a rapid pace in the coming years, owing to the high demand for EIFS in the construction sector. The regional market growth is further attributed to the increasing demand for insulation and waterproofing solutions. The US is experiencing climate changes, such as rising temperatures and increasing sea levels.

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