Vancouver, B.C. — A report on the trends occurring in the U.S.
residential decking market was released today by WOOD Markets newsletter,
Vancouver, B.C.
The outlook for decking demand in the next few years is likely to be flat as new
housing starts slow down and repair and remodeling activity experiences limited growth.
"At the same time," said Peter Butzelaar, Associate Editor of WOOD Markets
and author of the report, "traditional wood decking products such as treated southern
yellow pine, redwood and western red cedar are facing rising competition from alternative
products like plastic-based decking and imported lumber."
To avoid loss of market share and to defend their presence in the decking market, SYP
treaters as well as redwood and western red cedar (WRC) producers will need to consider
new marketing initiatives rather than just lowering prices. "The success of plastic
producers’ warranties and targeted promotion as well as the increasing acceptance of
imported hardwoods has raised the bar," commented Butzelaar.
As background, the decking market is comprised of three main segments: treated decking
(83%), naturally durable wood (14%) and hardwood imports and plastic decking (4%). Between
1995 and 1999, the volume of durable redwood and western red cedar (WRC) consumed in decks
increased from 425 million bf to 555 million bf yet their collective share of the overall
market remained at 14 percent. Treated wood, on the other hand, saw its volume rise from
2.6 billion bf in 1995 to 3.4 billion in 1999 while its overall market share slipped from
85% to 83%.
Plastic lumber may have only a 3% share of the residential decking
market but its rate of growth has been dramatic. Plastic lumber production doubled from
1998 to 1999 and, by 2001, plastic lumber production will have more than doubled again to
attain a 7% market share. Of the plastic lumber production produced in 1999 (160 million
bf), it is approximated that at least 75% was directed into the residential decking
market. The benefits of plastic lumber are that the material is more durable than wood, is
maintenance-free and comes with warranties of up to 50 years. "Future growth appears
to be limited only by plant capacities and the availability of recycled plastics,"
explained Butzelaar.
For those who want the performance and durability of plastic lumber but appreciate the
aesthetic experience of wood, an attractive but pricey alternative is imported
naturally-durable hardwoods from Southeast Asia and South America. Species such as
Meranti, Ipe, Balau, Philippine Mahogany and others are being offered at prices that are,
in some cases, below that of plastic and clear cedar. While imported hardwood decking is
still less than 1% of the U.S. residential decking market, it provides a niche in the
market that is not fully being met by traditional wood and non-wood decking products.
A relative comparison of retail decking prices (lineal foot basis)
using 5/4x6 pressure treated SYP as the basis (index = 100%) indicates that the most
expensive decking product is 2x6 clear western red cedar, which is almost five times the
cost of treated SYP. The price of higher quality plastic decking is 3.8 times that of
treated wood and 1x6 Ipe (a Brazilian, decay resistant hardwood) is 3.2 times treated SYP.
The least expensive identified alternative product to treated SYP is imported 5/4x6
radiata pine from Chile that is 2% lower than the price of treated SYP.
"Given the growth in composite decking products and the relative
premium they fetch, it is evident the market opportunity for these man-made, maintenance
free and warrantied products is not necessarily tied to price," concludes Butzelaar.
With so many decking choices available to the homeowner, more and more consumers are
making their decking decisions based on product benefits, maintenance issues and less so
on price alone. As a result, more changes in decking product usage are expected as new
products and technology strive to meet the needs of consumers.
Source: WOOD Markets
-30-
For more information, please contact:
Peter Butzelaar, Associate Editor, WOOD Markets
Analyst, International Wood Markets Research Inc. / R.E. Taylor & Associates
Ltd.
Vancouver, B.C. Ph: (604) 801-5996 E-mail: peterb@woodmrkts.com
