Plywood and Engineered Wood Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,000 companies in the US produce a variety of wood-based and wood-like products, including plywood, veneer, and reconstituted wood products. Major revenue categories include plywood and veneer (hard or soft wood); reconstituted wood sheets and boards (particle board); roof and floor trusses; and engineered wood products. Firms may also manufacture related products or kits, such as outdoor furniture, pergolas, or specialized saws. Engineered wood is a term that may apply to the entire industry (veneer, plywood, reconstituted wood, trusses, and composite products) or just composite products.
Sensitivity to Economic Conditions and the Construction Sector
Demand for plywood and engineered wood products is highly dependent on the health of the construction industry, which is sensitive to economic conditions.
High Capital Requirements
Production of plywood and engineered wood products requires an investment in specialized equipment and machinery.
Industry size & Structure
The average wood product manufacturer operates out of single location, employs about 83 workers, and generates $37 million annually.
- The plywood and engineered wood product manufacturing industry consists of about 1,000 firms that employ about 83,000 workers and generate $37 billion annually.
- Most sub-industry categories are concentrated; the top 50 companies account for 89% or more of industry revenue for manufacturers of plywood and veneer, engineered wood, and reconstituted wood products. The top 50 companies account for 66% of industry revenue for truss manufacturers.
- Plywood and veneer manufacturers account for about 27% of industry revenue and 23% of firms. Reconstituted wood manufacturers account for 29% of revenue and 13% of firms. Truss manufacturers account for 33% of revenue and 55% of firms.
- Large companies include Louisiana-Pacific Corporation, Trex Company, and Roseburg Forest Products. Weyerhauser Company, Georgia-Pacific, and Boise Cascade have wood product manufacturing operations.
Industry Forecast
Plywood and Engineered Wood Manufacturers Industry Growth
Recent Developments
Sep 25, 2024 - Architectural Billings Decline
- Demand for building design services declined in August compared to the prior month, marking continued softness for architectural billings, according to a September report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) declined to 45.7 in August from July’s reading of 48.2. Any reading of 50 or more indicates growth in architectural billings. August was the nineteenth consecutive month to see a downward trend in billings. The score for new project inquiries was flat at 52.4 in August, but the index for the value of new design contracts increased from 46.5 to 47.3. The AIA’s Chief Economist, Kermit Baker said, “Unfortunately, even the impending interest rate cuts didn’t move the needle on project inquiries or new design contracts at architecture firms. Hopefully, once the trajectory of further cuts gets clarified, delayed projects will restart, and new projects will gather momentum.
- The number of building permits issued for single-family, privately-owned housing units, a demand driver for building inspection services, increased 2.8% month-over-month but declined 0.5% year-over-year in August 2024. Single-family housing starts grew by 15.8% month-over-month and increased 5.2% year-over-year in August. Single-family housing completions dropped 5.6% month-over-month but grew 8.4% year-over-year in August. The August rise in housing starts was helped by moderating interest rates. However, builders still face supply-side headwinds, including labor and lot shortages and stubbornly high prices for some types of building materials, according to the National Association of Home Builders (NAHB).
- Home builder confidence in the single-family market improved in September amid moderating mortgage interest rates, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose two points to 41 in July 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. September’s gain in the HMI followed four consecutive months of declines. The HMI survey also showed that 32% of builders have reduced home prices to lure potential buyers off the sidelines, although the average price reduction of 5% was the lowest since July 2022. However, while the Fed’s recent rate cut will reduce the cost of land development and construction loans, builders are seeing increased competition from existing home listings in some markets.
- At its meeting in September, the Federal Reserve voted to reduce interest rates by half a percentage point, which would put the benchmark federal funds rate between 4.75% and 5%, according to The Wall Street Journal. Projections of fed officials’ moves suggest another four quarter-point cuts will come next year, which would bring the federal funds rate down to 3.5% by the end of 2025. Home-improvement retailers will benefit if lower interest rates translate into increased remodeling spending, according to Business Insider. Home Depot and Lowe’s have seen their fortunes erode as high interest rates have prompted homeowners to postpone big-ticket projects. High interest rates have also curtailed existing home sales, which are a key driver of remodeling demand.
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