Polyvinyl chloride (PVC) constitutes the second-largest thermoplastic manufactured worldwide after polyethylene. Though the PVC market is back on its growth trajectory after experiencing collapsed demand in several markets, overall performance is expected to remain anemic over the short term as the industry struggles to emerge from problems such as sluggish recovery in the construction sector, lingering overcapacity and thinning operating margins, as stated by the new market research report by Global Industry Analysts Inc. The year 2011 is expected to be another unstable year for players in the PVC market as they continue to wrestle with slow demand and high production costs to re-gain operating margins recorded during pre-recession times. The global market for PVC products witnessed a contraction in demand in recent years owing to the financial crisis, and de-stocking that prevailed across the value chain. Various end-use markets such as construction, consumer goods and packaging registered a fall in activity, across the world. Manufacturers in the US and Europe encountered weak demand in the domestic markets due to slowdown in construction activity along with tight credit conditions. Middle East, which witnessed high consumption levels before financial crisis, experienced a decline in PVC demand as various infrastructure and construction projects got delayed due to the financial crunch. Besides, the Asian economies also registered a fall in consumption owing to the slowdown in construction projects. PVC is also known as an 'infrastructure plastic' with the construction market accounting for about 60% of total demand. Developing countries in Asia-Pacific and the Middle East hold the best prospects for PVC in the long term. Among these, China and India represent the most promising markets due to large population size and infrastructural development initiatives. India is expected to witness an increase in demand due to the growth in infrastructure and packaging sectors. China represents the fastest growing market for PVC with a projected CAGR of 4.7% during the analysis period. In Russia and Ukraine, demand for vinyl continues to grow due to increased demand from the construction industry, regardless of the economic slowdown in the region. Higher growth rates are also anticipated in the Middle East and Eastern Europe with contribution from the oil industry. Latin America is another region, which holds bright prospects for PVC growth during the forecast period owing to increase in construction activity. In near future, new capacity additions in the market are expected to stem from Asia and the Middle East, while the developed economies of West Europe and North America are expected to delve with high feedstock and energy costs. The declining US housing market made a significant impact on the country's PVC demand as the market faced a challenging environment in the form of poor construction activity, termination of financial incentives for residential property buyers and unrelenting credit limitations. The fall in demand was also attributed, though partially, to rising imports of finished goods. Growth in West Europe is expected to remain weak, as PVC continues to face reduced demand from the construction sector. In Europe, PVC is largely used in fittings, pipes and window profiles. Other applications such as bottles and packaging continue to register decline in favor of polyolefin and polyethylene terephthalate (PET). Leading market participants covered in the study include Arkema, Chemplast Sanmar Limited, Chemson Group, Ercros SA, Aiscondel, Formosa Plastics Corporation, Formosa Plastics Corp., INEOS Group Ltd, INEOS Vinyls Limited, Georgia Gulf Corp, Limburgse Vinyl Maatschappij (LVM), LG Chem, Mitsubishi Chemical Corporation, Occidental Chemical Corporation (Oxychem), OxyVinyls, PolyOne Corporation, Shin-Etsu Chemical Co., Ltd., Solvay, SolVin, Vestolit GmbH & Co. KG, Vinnolit GmbH & Co. KG, among others. PVC is a globally manufactured product, produced by over 100 companies in approximately 50 countries. Practically all incremental capacity during 2005–2009 was installed in China, and to a lesser extent, India and the Middle East, as per TD The Market Publishers, Ltd. PVC market is being affected by major changes, including rising feedstock and distribution costs, the global economic crisis, substitution of biopolymers and polyethylene terephthalate for polyvinyl chloride and the growth of both demand and production in China. About 70% of world consumption of PVC is for pipes, fittings, siding, windows, fencing and other applications. It has increasingly been used as a replacement for traditional construction materials such as wood and metals, so its growth has been above that experienced by the overall construction industry. In industrialized countries, demand will be strong for piping and fittings, specially for telecommunications and natural gas. In the developing world, PVC pipe will grow rapidly, particularly for infrastructure for drinking water, sewage and drainage. Other leading applications for PVC are siding, windows, fencing and packaging sheet. PVC consumption is highly dependent on the construction market. Demand has remained weak in 2009 following the collapse in consumption experienced in H2-2008 as the weak economic outlook continued to restrict activity within the key construction sector. Demand for flexible PVC has declined in the industrialized world, but continues to rise in certain countries. During the past few years, the global PVC market has seen growth of around 4% pa. Growth rates on the developed markets had been slipping as these markets matured while stronger demand growth has been seen in central and eastern Europe as well as Asia, in particular China and India. Future PVC projects are planned in a number of countries. Major capacity will be introduced in 2010 mainly in Asian region. The major concerns for the worldwide PVC industry are presented today by health and environmental issues, and even product image itself. Solid waste disposal and the potential for recycling are among the major issues facing PVC and other plastics today. PVC forms dioxins and other potentially harmful compounds. PVC producers, especially in Europe, have been developing methods for recycling. In addition, some large retailers are requiring suppliers to use non-PVC packaging because of recycling concerns.