Growth expected to pick up for IRP.

Demand for industrial rubber products in the U.S. is expected to increase 2.9% annually to $17.5 billion in 2010, according to a new report from The Freedonia Group, a Cleveland, OH-based firm.

Aggregate increases in demand for IRPs will benefit from an acceleration in durable goods output, as growth continues to rebound from the 2001 to 2002 economic downturn. The routine maintenance and repair needs of the vast installed base of vehicles, equipment and machinery that went into service in the 1990s will support aftermarket demand for industrial rubber products. More expensive components are being used due to changes in equipment designs, particularly higher operating temperatures in engine compartments, the report states. On the other hand, greater use of more durable rubber products will serve to limit gains for certain IRPs in the aftermarket.

Mechanical rubber goods account for just over half of total demand in 2005. Included in this group are bushings, boots, body seals, moldings and wiper blades. Both hoses and belts, used heavily in the durable goods sector, will benefit from an improved outlook for motor and other transportation equipment, the study says. However, unlike most types of mechanical rubber products, hoses and belts have frequent replacement rates, providing for steady gains from repair and maintenance.

Among the major product types, rubber roofing membranes are expected to see the fastest increases through 2010, Freedonia says. This is supported by strong growth in nonresidential improvement expenditures and solid gains in thermoplastic polyolefin roofing membranes. Some of these increases, however, will come at the expense of other rubber roofing products.

Industrial equipment, which includes industrial machinery and equipment as well as off-road vehicles, will remain the largest market for industrial rubber products. Freedonia says that demand in these applications will accelerate as the manufacturing outlook continues to improve. However, the aerospace and other transportation equipment markets will see the fastest increases, according to the report. Gains will be driven primarily by strong growth in aerospace and other transportation equipment shipments and a healthy aftermarket supported by the rising number of aircraft in service and strict and rigorous maintenance schedules. Motor vehicles will also remain an important market, trailing only industrial equipment, due to the wide range of applications in cars, trucks and buses, the report says.

U.S industrial rubber product demand (million $)

                                                  % annual growth

                      2000      2005      2010     05/00    10/05

Mechanical goods     7,330     7,695     8,850       1.0      2.8
Hose                 1,988     2,025     2,300       0.4      2.6
Belts                1,570     1,715     2,015       1.8      3.3
Roofing              1,400     1,660     1,980       3.5      3.6
Other                2,048     2,080     2,340       0.3      2.4

Total               14,336    15,175    17,485       1.1      2.9