US demand for coated fabric to rise 3.5% annually through 2016

US demand for coated fabrics is forecast to increase 3.5% pa to 635 mln square yards in 2016, an improvement from the declines of the 2006-2011 period. Gains will be driven by a rebound in motor vehicle production, a significant outlet for coated fabrics. In addition, renewed economic growth, along with rising manufacturing output, and rebounding construction activity will provide opportunities for coated fabrics. In value terms, coated fabric demand is projected to expand slightly faster than in area terms, based on price increases. Nevertheless, price increases will moderate from the 2001-2011 period, when costs of certain raw materials, such as crude oil-based polymers, rose substantially. Greater competition from lower cost imports, especially from China, will also work to restrain pricing gains. In 2011, 27% of all coated fabric demand was dedicated to the motor vehicle market in applications such as airbags, upholstery, headlining, trim, tops, and covers. Airbags are projected to provide the best growth opportunities, driven by an increase in the number of airbags per vehicle. This is partially due to government regulations and the inclusion of more airbags into a larger number of types of vehicles at varying price points. Among other markets, those that are most closely tied to renewed construction activity (e.g., wallcoverings, furniture, and awnings and canopies) will achieve above-average growth. The protective clothing market will also achieve above-average gains, benefiting from accelerating manufacturing output, where processes in industries such as chemicals, pharmaceuticals, and electronic, require employees to wear protective gear, as well as ongoing spending on such equipment for military personnel and first responders. In 2011, coated polyester held the largest share – 46% -- of coated fabric demand. Sales of coated polyester will benefit from its low cost and versatility. While used in a variety of markets, the light vehicle, furniture, and industrial markets account for the largest share of coated polyester sales. Through 2016, coated polyester will remain the largest substrate category, but coated nylon will achieve the fastest gains in sales. Demand for coated nylon will be spurred by its use in several above-average growth markets, such as airbags and protective clothing. In 2011, polymer-coated fabrics comprised the largest share of coated fabric demand in value terms, accounting for 88 percent of the total. Within this category, vinyl-coated fabrics are the most commonly used materials, accounting for 40 percent of total polymer-coated fabric demand in 2011. The significant share of vinyl-coated fabrics is primarily due to its relatively low cost and adequate durability for many applications. Among the major types of polymer-coated fabrics, vinyl-, polyethylene-, and polypropylenecoated versions will post the fastest gains through 2016. The rubber-coated fabric product category is much smaller, but growth will benefit from the use of silicone varieties in airbag production. Advances will be fastest for fabricbacked wallcoverings, which will be promoted by a recovery in the building construction sector, especially in the institutional and office segments where wallcoverings find significant use.