The North American gypsum product industry is highly cyclical Demand for gypsum products, particularly gypsum board, was very strong during the late 1990s and into 2000. In response, gypsum board manufacturers in North America opened a spate of new plants. Beginning in late 2001 and continuing into 2002, however, the combination of capacity increases and weaker construction demand left the industry in a situation of overcapacity and resulted in a sharp drop in gypsum board prices. As a result, many industry participants began the process of rationalizing their capacity. These and other trends are presented in Gypsum Products in North America, a new study from The Freedonia Group, Inc., a Cleveland-based market research firm. Demand for gypsum products in North America is forecast to advance 2.1 percent per year through 2007 to 46.8 million metric tons Gains as measured in dollar value will fare even better, rising 4.1 percent per annum to US$4 billion in 2007. Growth in product value will be stimulated by a recovery in gypsum board pricing, although the firming in pricing will primarily represent a stabilization as prices return to the levels of the mid-1990s. Gypsum board is the dominant gypsum product sold in North America, accounting for nearly three-quarters of total demand in 2002 as measured by weight. In this key product segment, demand is expected to advance 1.8 percent per year to 36.4 billion square feet (34.1 million metric tons). Among the different gypsum board products, specialized boards such as type X, water-resistant and mobile home gypsum board will fare particularly well. Gypsum used as an additive for cement is expected to lead gains, advancing roughly three percent per year through 2007. Growth in cement markets will be supported by the rebound in nonresidential construction in the US, as well as by continued infrastructure-building efforts in Mexico. Other gypsum products expected to show above-average growth through 2007 include building plasters and industrial gypsum used as a filler in manufacturing operations. Manufacturers of gypsum products continue to rely on an increasing amount of synthetic gypsum -- as opposed to mined gypsum -- as a raw material In 1992, synthetic gypsum accounted for only two percent of all gypsum consumed in North America. By 2002, synthetic gypsum had increased to 20 percent of all gypsum consumed, and by 2007 the share of synthetic gypsum is expected to rise to over 30 percent.

NORTH AMERICA GYPSUM PRODUCT DEMAND (thousand metric tons)
				% Annual Growth
Item	1997	2002	2007	02/97	07/02
Gypsum Products Demand	35890	42080	46800	3.2	2.1
% board	71.1	73.2	72.8	0.6	-0.1
Gypsum Board Demand	25525	30810	34060	3.8	2.0
Gypsum Products Demand (million US$)	3104	3265	3985	1.0	4.1