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The global cross laminated timber market size was USD 725.9 million in 2020 and is projected to grow from USD 806.0 million in 2021 to USD 2,066.1 million in 2028 at a CAGR of 14.4% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with these products witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a huge decline of 4.1% in 2020. The sudden decline in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The cross laminated timber, also called CLT or XLam, is a pre-assembled engineered wood lumber product consisting of more than two layers of solid-sawn or structural composite timber. The layers are laid such that the adjoining layers are cross-oriented and are bonded with an adhesive or a mechanical fastening to form a solid wood element. It was developed in Alpine countries of Europe in the early 1990s and is now a well-established building material in Europe, and is gaining popularity in North America and Asia Pacific countries. It is used majorly in the construction of prefabricated building structures or to construct buildings on-site in a small duration. Structurlam estimates building installation of up to 14000 sq.ft. per day with a team of 6 technicians, whereas construction activities of a similar scale using conventional products may have a lead time of multiple weeks with a significantly higher amount of labor. It provides advantages such as design flexibility and good seismic performance. It also shows good acoustic and thermal insulation performance and is an environmentally sustainable material. These factors have led to the adoption of the material in the construction of many buildings in Europe and North America.
Pandemic has Highlighted the Rising Demand for Sustainable Construction Materials
Although the coronavirus pandemic caused disruption in the supply chain by affecting the supply of wood and reducing demand from the construction industry, the global boom for the material is not stopped as of yet. On the contrary, the pandemic has further invigorated the demand for sustainable construction materials. It is now projected that the materials demand shall grow at a greater growth rate in the medium and long term. The pandemic, though, has very mildly affected the market performance. Many large construction projects based on the material were frequently postponed due to lockdowns and unavailability of skilled labor. This affected the performance of many key companies operating in the market.
However, in near future, the companies expect a challenging yet rewarding market situation with newly installed production capacities coming online and a positive outlook of the market in the future. The percentage of timber-based construction is gaining traction in Europe as well as North America, while other regions are also gradually becoming more open to timber construction. These factors are thus going to help the market regain its growth trajectory in a very short period.
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Availability of Regional Wood as Raw Material to Attract Manufacturers for R&D of New Variants
Traditionally, cross laminated timber was manufactured using local raw material, hardwood from coniferous trees, available in the alpine region. But, with increasing popularity in other parts of the world, companies are experimenting with soft and temperate wood species for the manufacturing of the material. In North America, softwood is available in plenty and thus substitution of conventional hardwood is inevitable in the region. China, on the other hand, is researching the usage of bamboo in the alternate layers to increase the share of the local raw material utilized in the product. Such new developments may lead to improved performance of the material and are projected to increase the adoption of CLT over conventional construction material in these regions.
Rising Demand for Environment-Friendly Construction Materials to Drive Industry Growth
The increasing demand for cross laminated timber, an environmentally sustainable construction material, is due to increasing consumer awareness regarding damages caused to the environment during the manufacturing process of cement and bricks. Thus, consumers and technicians are shifting their focus on the usage of sustainable materials such as wood in the construction of buildings and other infrastructure. As CLT is manufactured using wood, many governments also support its usage in construction and provide monetary and space-liberty benefits to the user. For instance, in 2020, India’s Public Works Department removed the ban on timber in the construction of buildings and habitat projects to spur the local economy. Furthermore, the timber also shows better thermal and acoustic insulation as compared to conventional construction materials and thus reduces the usage of detrimental materials such as glass wool and foamed plastics for building insulation. Thus, the environmental benefits provided by the material have been a vital reason for its adoption in the construction industry.
Growth in the Construction Industry to Translate into the Growth of the Xlam Market
The construction industry, especially in the Asia Pacific and Latin America, is expected to show considerable growth in the near future. Despite being numbed by the occurrence of the COVID-19 pandemic, large-scale investments planned by the governments of India, China, Brazil, and Pacific countries, are expected to result in the growth of the construction sector. This growth is expected to translate into the growth of the market as both governments and construction companies are seeking sustainable building materials to develop infrastructure and meet the WHO standards for CO2 emissions. As wood is a known carbon sequester, its usage in construction is expected to expand, thus driving the growth of wood products including mass timber materials such as XLam. These factors are likely to drive market growth.
Mediocre Fire and Moisture Resistance Impeding the Adoption of Cross Laminated Timber
CLT being a wood-based material has similar disadvantages like mediocre performance against fire and moisture. While many companies claim that the wood can burn up to 2 hours in case of fire, showing good fire-proof capability, it doesn’t match the performance of conventional building materials. Furthermore, the wood-based material is susceptible to damage caused by moisture. Accumulation of water in walls, floors, and edifices may lead to the formation of mold and bacteria, which may prove to be detrimental to the infrastructure. Thus, these factors are critical in decelerating market growth.
Adhesive Bonded CLT to Hold Dominant Cross Laminated Timber Market Share Owing to its Significantly Lower Cost
Based on bonding technology, the market is classified into adhesive bonded, and mechanically fastened. The adhesive bonded segment is expected to grow The strength of the wooden-based material is dependent on how strong the adjacent layers are attached. As adhesives provide higher bond strength and are less affected by environmental conditions as compared to mechanical fasteners, the adhesive bonded material is utilized on a dominant scale in the market. Another vital reason for the dominance of adhesively bonded segment in the global cross laminated timber market is that adhesives cost significantly lower than the mechanical fasteners which lowers the cost of manufacture of adhesive bonded CLT as compared to mechanically fastened timber material.
Despite all the above-mentioned disadvantages, a mechanically fastened segment is gaining market share owing to environmental concerns regarding the usage of adhesives, that are manufactured using petrochemicals and other harmful materials. Furthermore, mechanically fastened timber is easier to be customized, which provides a novel pathway for its growth in the global market.
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Large Adoption of CLT in Commercial Construction Expanding the Market Share of Non-Residential Buildings Segment
In terms of application, the market is segmented into residential buildings, non-residential buildings, and others. Non-residential buildings application holds the largest share on account of large scale application of CLT in the construction of office buildings in North America and Asia Pacific. The usage of CLT in commercial construction in Europe is also expanding, which further results in the growth of the non-residential buildings segment.
On the flip side, the residential buildings segment is expected to give stiff competition to the non-residential segment on account of the large-scale consumption of this type of timber for the construction of multi-family buildings in developing regions. Furthermore, in Europe, CLT is majorly used in residential buildings as they provide excellent thermal insulation performance, which has resulted in the growth of the residential segment in the global market.
Europe Cross Laminated Timber Market Size, 2020 (USD Million)
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The CLT market size in Europe stood at USD 445.2 million in 2020. Europe is expected to lead the market owing to the large adoption of the material in the building of small and medium-sized houses in the region. Europe accounts for 65% of the global timber-based wood material production and the majority of the product is used locally as Xlam provides better insulation performance against the cold temperatures usually present in the region.
On the flip side, the market in North America is governed by the adoption of CLT in the construction of hybrid buildings that utilize a combination of timber and conventional materials to create artistic building design for office spaces. The market in Asia Pacific will be led by demand from Japan and Australia & New Zealand, wherein it is utilized for the construction of wood-based buildings with enhanced seismic performance characteristics. The market in China is expected to expand owing to research being carried out to include locally grown bamboo in the product’s manufacturing, which shall reduce the cost of the product, making it affordable compared to conventional building materials. The market in the Rest of the World is in the nascent stage yet and thus shall gain market share in the near future as the adoption of timber material increases in the region.
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Key Market Players Are Focusing to Improve Their Production Capacities
The competitive landscape of this market depicts a highly consolidated market with the top 5 companies accounting for a majority share in the market. Key players in the market are investing a large number of resources in the research and development of CLT grades and applications. Companies are carrying out research to develop Xlam from lumber obtained from trees and plants such as bamboo, along with improving their performance against temperature fluctuations and acoustic variation as a course way to gain market share.
Furthermore, key players operating in the market have adopted the strategy of capacity expansion to improve their turnaround time and serve their customers faster. This trend is projected to positively impact the global market during the forecast period.
An Infographic Representation of Cross-laminated timber (CLT) Market
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The global cross laminated timber market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, laminate bonding technologies, and leading applications of the cross-lam. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
Volume (Thousand Cubic Meters); Value (USD Million)
By Bonding Technology; By Application; and By Geography
By Bonding Technology
Fortune Business Insights says that the global market size was USD 725.9 million in 2020 and is projected to reach USD 2,066.1 million by 2028.
Growing at a CAGR of 14.4%, the market will exhibit rapid growth in the forecast period.
Non-residential buildings segment is expected to be the leading segment in this market during the forecast period.
Rising demand for environment-friendly construction materials shall be the key driving factor for the growth of the market.
Europe held the highest market share in 2020.
Environment-friendly nature of the raw material coupled with excellent insulation and seismic performance as compared to conventional building products shall be the key factors driving the adoption of CLT.
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