As the new year began and the Omicron variant of COVID-19 led to a surge in cases, a sense of deja vu permeated the business landscape. But economists say there is reason for optimism in 2022. In its annual report condensing key viewpoints from dozens of investment outlooks, Bloomberg News forecast that the global economy will grow by 4.5% this year.
Composites Manufacturing magazine caught up with four consultants to shine a spotlight on three key market segments in the composites industry and provide predictions on glass and carbon fiber.
The Automotive Market
By Marc Benevento, President
Last year will be remembered for the promise of a strong recovery of automotive production followed by the disappointment of supply chain disruptions that suppressed year-over-year growth. However, brighter days are ahead for suppliers to the industry as production is expected to recover to pre-pandemic levels over the next 24 months. Furthermore, the continued shift toward electric vehicles will favor increasing use of composite materials in the automotive industry.
The global market for light vehicle composite materials was 3.7 billion pounds in 2021, far short of where it was just a few years ago. Global light vehicle production plummeted 16% in 2020 due to COVID-19 shutdowns, and demand recovered more quickly than a stressed supply chain could support. After a strong start to 2021, global production gained a paltry 2% over a disastrous 2020, leaving automotive composites consumption 20% below the pre-pandemic level.
Despite the difficulties of the past two years, better times are ahead for suppliers of automotive composites. Demand for automobiles remains strong, particularly in North America. Supply chain constraints are expected to ease over the course of 2022, and production should return to pre-pandemic levels by late 2023 or early 2024. Suppliers that have weathered the storms of the past two years have reason to hope that the next two years will present a more hospitable business environment, with 8 to 10% annual volume growth expected in that timeframe.
In addition to the tailwind of market recovery, composites continue to win automotive applications based on the value they provide carmakers in terms of cost, weight and performance. Electric vehicles are particularly well suited to composites due to their low under hood temperatures and the position they currently occupy in the market, which will expand the available market for manufacturers of composite materials in automobiles.