Slump in demand in the thermal insulation materials industry

Following previous record-breaking years, the thermal insulation materials industry is facing a profound decline in demand, which has been ongoing since mid-2022. Will the downward trend continue? The research and analysis company forecasts a gradual improvement in the situation in its latest report on the thermal insulation materials market.

Sharp decline in market size and value

PMR, in its just-published report, “Thermal insulation materials market in Poland 2023. Market analysis and development forecasts for 2023-2028”, indicates that the 2023 results will be very poor. However, PMR’s forecast for the following years is moderately optimistic.

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After the phenomenal first half of 2022, there has been a marked change in the market situation. There was a dip in residential construction followed by commercial investments in the subsequent weeks. This directly affects manufacturers of thermal insulation materials. Their concerns about the state of the market grew month by month and, as the market data shows, they were not unfounded.

Marcin Uryga
Senior Construction Market Analyst at PMR and the author of the report

Find comprehensive information about the current state of the Polish thermal insulation materials market in the PMR report:

Thermal insulation materials market in Poland. Market analysis and development forecasts for 2023-2028. Impact of inflation and war in Ukraine.

More information

More opportunities than threats for the industry

For the report, PMR conducted in-depth interviews with representatives of thermal insulation materials manufacturers. The interviewees were asked, among other things, to assess the opportunities and threats for the sector. PMR analysts point out that respondents found it much more challenging to compile a list of opportunities than threats for the thermal insulation materials sector in 2022. Now the situation is reversed, which is indicative of the industry’s positive perception of the coming years.

However, the fact that it is currently easier to identify potential opportunities is also due to some of the previously identified threats (inflation, decrease in the number of granted loans, etc.) simply already having materialised and, depending on the specific factor, an improvement in the situation can be expected in the short or long term.

Despite the relatively favourable medium-term outlook, it should not be ignored that insulation materials manufacturers are currently in a very difficult position.

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Demand is very weak and fierce competition in an environment of rising business costs (labour, energy) leads to erosion of margins. The sector's profitability in 2023 will not approach the levels of the previous two years.

Marcin Uryga
Senior Construction Market Analyst at PMR and the author of the report

From one extreme to another

PMR experts emphasise that the situation in the thermal insulation materials market is undergoing rapid changes for another year in a row, and stabilisation is a forgotten state.

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The weak economic climate in the residential construction industry must have translated into a severe deterioration in the state of the thermal insulation materials sector. Thermal modernisations of buildings, despite high heating prices and programmes promoting energy efficiency improvements, have failed to fill in the gap created by the slowdown in new construction. The calming of energy commodity prices and the protective measures taken by the state have also slightly reduced the potential of thermal modernisation.The supply-side problems of previous years (availability and cost of commodities) were immediately replaced by demand-side problems.

Marcin Uryga
Senior Construction Market Analyst at PMR and the author of the report

The next few months for manufacturers and distributors of thermal insulation materials will then continue to be a time of operating in a high-risk environment. Choosing the right survival strategy will not be easy, and the ability to minimise losses and effectively exploit competitive advantages may prove crucial.

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Marcin Uryga

Senior Construction Market Analyst