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The Europe construction aggregates market size was USD 17,788.1 million in 2019, and it is projected to reach USD 23,327.3 million by 2027, exhibiting a CAGR of 4.2% during the forecast period.
Aggregates are raw materials extracted from natural cradles such as pits and quarries. They include products such as gravel, crushed stone, and sand and gravel. Being often overlooked in construction activities for being just unglamorous rocks, they play a crucial role in several applications. According to the Association of Equipment Manufacturers, aggregates make a foundation for the roads, bridges, and buildings and make up over 90% of asphalt pavement and up to 80% of a concrete mix. Construction of a mile of two-lane interstate highway requires about 75 KT of aggregate while building a two-story house requires about 400 tons. With growing urbanization in Europe, the demand for construction aggregates is projected to expand in the region during the forecast period.
Stoppage of Construction Activities Due to Coronavirus Pandemic Severely Affected the Market
The coronavirus pandemic spread led to lockdown in many European nations, including Germany, France, and Italy. Owing to the public-health impact and lockdown-induced recession, the economy of the region has plummeted. According to Eurostat, the EU recorded a contraction of around 14.4% in Q2 of 2020 on a year-over-year (YoY) basis. The demand for construction materials was affected due to weakened consumer confidence in the region in the wake of increasing unemployment. However, by 2021, recovery of the market will be visible, especially in renovation activities, with the governments implementing regulations to support the green revolution in the European construction industry.
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Increasing Need for High-Rise Buildings in Europe to Push Demand for Construction Aggregates
By the start of the 21st century, the architectural trends in Europe moved away from typical cubic structures towards more uniquely designed edifices. Since then, major financial centers like London, Paris, and Frankfurt saw major demand for commercial spaces and large residential complexes. With 60% of the global human population projected to be living in urban areas by 2030, residential skyscrapers are projected to gain prominence across the globe. Europe is also not immune to this phenomenon as the EU tries to keep up with China and the US's economic growth. Thus, it is evident that the density of high-rise buildings and skyscrapers will expand in the near future. As construction aggregates play an essential role in stabilizing the ground below the skyscrapper and create a sturdy structure, its demand is projected to expand during the forecast period.
Rapid Urbanization to be the Key Driving Factor for the Market
The rising population worldwide and the demand for employment have driven the people towards urban regions to live a life with high standards. According to LafargeHolcim, approximately 2.5 billion people are expected to shift to urban areas by 2050. As the concentration of people living in urban areas is quite high, the demand for high rise buildings for the provision of living space is excessive. On a similar note, demand for buildings and infrastructure such as schools, colleges, industries, and transportation structures has also gained traction in such regions. Europe has been at the center of urbanization post-industrial revolution, with some of the largest urban hubs such as London and Paris being present in the region. Furthermore, Eastern Europe has been experiencing rapid growth as people shift towards cities searching for a better living. Owing to these factors, the demand for high-quality construction materials, including aggregates, is projected to expand in Europe.
High Amount of Pollution Created During Aggregate Production Attracts Regulations for the Market
Production of aggregate results in the generation of dust, wastewater, noise, and transportation-related emissions. These emissions are some of the largest pollutants present in the environment. According to the UK environment ministry, quarries are responsible for a fifth of their particulate matter emissions. Furthermore, quarry operations result in the generation of a hefty amount of noise. It is estimated that the quarry's noise levels can cross the level of 100 dB, which can prove harmful for human hearing.
On a similar note, wastewater generated during the production process contains sand, lime, and gravel, which makes it unsuitable for domestic usage. To cater to these pollutants, environmental agencies and governments are implementing regulations to restrict the building materials industry’s pollution footprint. For instance, the EU Water Framework and Groundwater Protection Directive was established to preserve freshwater quality. As these products cost very low per unit weight, the development of pollution reduction technologies can shrink profit margins for companies, thus hindering the Europe construction aggregates market growth.
Crushed Stone Segment to Hold the Dominant Share of the Market
On the basis of type, the market is segmented as crushed stones, sand & gravel, recycled aggregates, and others. Instead of being shaped or formed naturally in river beds or canyons, crushed stones are produced by crushing larger rocks with machinery. Crushed stone plays a vital role in the production of concrete and asphalt types. It is also largely used in the construction of building foundations, drainage systems, and roads. As crushed stones have jagged and angled edges, they provide a larger surface area for bonding of sand, water, and other components of ready-mix concrete and thus hold the dominant share of the market
On the flip side, the construction industry's circularity is under scanner as it is one of the largest wastes producing industries. Manufacturers have developed recycled aggregates to improve their sustainability and reduce the dependence on the depleting natural resources for aggregates. These aggregates are obtained from demolished architectures and thus reduce the consumption of building construction materials and accessories, reducing the overall infrastructure development cost. Owing to this factor, the recycled aggregates segment is projected to grow at the fastest rate in the Europe construction aggregates market.
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Structural Materials to be the Leading Application During the Forecast Period
Based on application, the market is categorized into structural materials, ready mix concrete, precast concrete, asphalt types, and others. Amongst these, the structural materials segment accounted for the largest share in 2019 and is projected to grow at the fastest rate during the forecast period. Aggregates are used as a raw material combined with other resources to construct structures such as houses, apartments, schools, hospitals, and commercial spaces.
On the other hand, ready mix concrete consists of a mixture of fine and coarse aggregates, cementitious binders, and water. This ready-mix concrete offers durability, strength, waterproof ability, and resistance to scuffing. All these characteristics of the concrete are dependent on the quality of the component materials and their proportions. Today, ready mix concrete is commonly used to construct highways, bridges, dams, airports, sewers, tunnels, and other common structures. Therefore, it is projected that the segment will grow at a considerable rate over the forecast period.
Commercial Segment to Gain Significant Market Share During the Forecast Period
On the basis of end-use industry, the market is divided into commercial, residential, industrial, and infrastructure. Europe has emerged as an industrial hub with many industries such as automotive and electronics having its key companies present in the region. Furthermore, Eastern Europe is proving to be an excellent ground for production and commerce activities and, thus, provisioning growth for the region's commercial segment.
According to European Commission, the demand for construction materials, including cement and aggregates, is expected to remain stable even during the coronavirus pandemic and is projected to be back on the growth track post-2021, especially for renovation activities. Therefore, it is expected that the infrastructure and residential construction segments of the market are to grow at an attractive rate in the near future.
Europe Construction Aggregates Market Size, 2016-2027 (USD Million)
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Germany has been a key hub in Europe for infrastructure development, with a dominant population living in urban areas. It currently holds a 14.7% share of the European market in terms of value. It is expected to continue to lead in the wake of green reforms in the construction industry announced by the European Union. On the other hand, the Benelux region's infrastructure projects are gaining traction due to the people's high spending capacity and strong support from the regional governments. Therefore, it is evident that the demand for aggregates will expand in Belgium and the Netherlands.
The UK, Italy, and France have been the epitome in structural engineering. With the growing demand for infrastructures such as hospitals and healthcare centers post Covid-19, the need for aggregates is expected to be stable during the forecast period.
Heidelberg Cement Group to Strengthen its Market Position Through Merger & Acquisition
The Europe construction aggregates market is highly fragmented, with no single company holding a market share larger than 5% in terms of product volume. Key industry players such as Heidelberg Cement Group and Eiffage Group are engaged in M&A activities to keep themselves ahead of the competition. Heidelberg Cement Group is one of the largest aggregates’ producers with resources and reserves of 19.2 Bn tons. The company manufactures an extensive range of natural and crushed aggregates utilized mainly in construction activities and concrete solutions. It operates over 630 quarries across the globe and has focused on acquiring quarries to increase its production capacity and improve its market share.
An Infographic Representation of Europe Construction Aggregates Market
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The report focuses on both qualitative & quantitative insights into the Europe construction aggregates market. Quantitative insights include the market sizing in terms of value (USD Million) and volume (MT) across each segment and country profiled in the scope of the study. The market research report also covers revenue and market share analysis and growth rates of segments and key countries across the region. Qualitative insight covers an elaborative analysis of market drivers, restraints, growth opportunities, key growth market trends, and market share forecast. Competitive landscape section covers detailed company profiling and SWOT analysis of the key players operating in the market.
Value (USD Million), and Volume (Million Tons)
By End-Use Industry
Fortune Business Insights says that the market size was 17,788.1 million in 2019, and it is projected to reach USD 23,327.3 million by 2027.
The market will exhibit decent growth at a CAGR of 4.2% in the forecast period (2020-2027).
The crushed stone segment is expected to be the leading product type in the market during the forecast period.
Rapid urbanization in Europe is the driving factor for the market growth.
Germany is expected to hold the highest market share in the market.
The increasing density of high-rise buildings in Europe is a key trend shaping the future of the industry.
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