Demand in the United States for gypsum products--primarily gypsum boards destined for new housing--will rebound sharply both in price and volume over the next 10 years compared with the previous five, the Freedonia Group forecast today.

The Cleveland-based research organization said demand for gypsum products is projected to grow about 3.1% per year, or 16.4% over five years, to reach just under 40 million tons in 2013 from 34.36 million tons in 2008. That compares with an 11% drop in the 2003-2008 period.

The forecast for 2013 through 2018 is just as robust, with demand seen growing 12.7% to 45 million tons.

The outlook is rosy in price terms as well. Freedonia expects the price of gypsum product per metric ton to climb from $73 in 2003 to $101 in 2008, $110 in 2013, and $120 in 2018. As a result, in dollar terms, demand for gypsum products in the U.S. should jump 28.2% between 2008's $3.43 billion and 2013's $4.4 billion. For the five years after that, U.S. demand in dollar terms will climb 22.9% to $5.41 billion in 2018, Freedonia forecast.

Roughly 70% of the demand for gypsum products comes in the form of gypsum board, and a lot of that board is used in new housing. As a result, the collapse of new housing construction in 2007 and 2008 hurt demand substantially for gypsum and gypsum products. But on the flip side, "the recovery of the U.S. new housing sector from its depressed 2008 levels will lead the industry back to positive growth," Freedonia said.

Canada and Mexico, which together account for about 18% of North American demand--also will see growth through 2013, but their numbers will be more modest, in part because their demand didn't shrink between 2003 and 2008. Demand in Canada will climb just 1.5% over the next five years, to 3.98 million metric tons, while demand in Mexico is forecast to rise 11% to 3.75 million metric tons.

Synthetic gypsum will continue to gradually increase its share of crude gypsum production from the 24% share it has now, Freedonia said.