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The UK adhesives and sealants market is currently
estimated to be worth around £706 million in 2008 at manufacturers
selling prices (MSP). There are growing concerns from a number of
areas of UK industry regarding the possibility of recession during
the latter part of 2008 and 2009, with these fears being supported
to some extent by current conditions in the residential construction
industry and retail sectors. With a softening of confidence in both
consumer and now business confidence, the market is forecast to
experience a downturn in demand for the next 2 years.
The overall market is forecast to decline by around
13% in the next two years to £654 million. This predicted downturn
is due primarily to the continuation of more difficult
macro-economic conditions in the UK in 2008 and 2009, with a
downturn in a number of key end use sectors, not least construction,
likely to result in a contraction in demand for adhesive and
sealants products.
Coupled with the likelihood of a slowdown in volume
sales, the market continues to be threatened by rising raw material
and fuel prices. These issues are indicated to have sustained
pressure on margins in recent years and this trend is likely to
continue as fuel shortages increase and demand for raw materials
from the developing nations increases.
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In recent
years, the market has become increasingly international in perspective,
with a rising number of manufacturers being represented in a large number
of countries. Given the continued pressure on margins from low cost
imports, the need for ongoing R&D, and other factors, indications are that
the industry will increasingly seek wider markets and become more ‘global’
in its approach.
One key area which is not
only sustaining pressure on margins, but also driving product development,
is that related to recycling and environmental issues and concerns.
Increasingly stringent regulations related to lessening the impact of
adhesive and sealant products on the environment are driving the need for
manufacturers to continually develop new products which conform to these
regulations. Environmental marketing is becoming a common component of
adhesive manufacturer’s core strategies and this issue is set to become
increasingly prevalent in the medium to longer term.
Within the individual end use
sectors, the packaging industry is likely to remain dominant in terms of
adhesive demand in the longer term. However, with an increasing awareness
of environmental issues from consumers, packaging adhesives are likely to
continue to evolve to meet changing expectations of the type and level of
acceptable packaging in consumer products.
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