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
May 28, 2024 - Improved but Flat Industry Growth
- The plywood and engineered wood manufacturing industry is expected to see weaker sales growth this year, and growth over the next several years will be flat. The industry’s year-over-year sales growth increased by 5.2% in 2022 before dropping to 4% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to moderate further to about 2.8% in 2024, then rise to 4.7% in 2025. The industry will then see steady but mostly flat average annual growth of about 4.4% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Amid a shortage of existing homes on the market, 61% of home buyers prefer new homes, according to a recent survey by the National Association of Home Builders (NAHB). The survey’s results show the highest share of new-home preference since 2007, when 63% of home buyers preferred new construction. Homeowners who locked in a low interest rate before 2022, when the Federal Reserve began raising interest rates, are reluctant to sell and swap their low-interest loan for a higher rate. New single-family homes have filled the void in the market left by a lack of existing homes for sale. Residential construction is a key demand driver for plywood and engineered wood products.
- A recent downturn in Home Depot’s sales could signal that a decade-long surge in home improvement spending is softening, according to The Wall Street Journal. In May, Home Depot reported first-quarter revenue of $37.26 billion, down 4.2% from the same period a year earlier. The home improvement giant also revised its full-year guidance downward to a sales decline between 2% and 5% from a February estimate of flat 2024 growth. Some industry observers suggest homeowners may have completed many of their home projects during the pandemic. Consumers may also be pulling back on their spending amid growing economic uncertainty and high interest rates and inflation. Remodeling activity is a leading demand driver for plywood and engineered wood products.
- Multifamily developers’ confidence declined in the first quarter of 2024, according to the National Association of Home Builders’ (NAHB) latest Multifamily Market Survey. The Multifamily Production Index (MPI) fell three points in Q1 2024 to 47 compared to the first quarter of 2023. The Multifamily Occupancy Index increased by one point to 83 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. Multifamily developers’ headwinds include a tight lending environment, higher borrowing costs, and difficulties with getting projects approved. A large number of multifamily projects currently underway is expected to dampen starts. The NAHB expects multifamily starts in 2024 to drop by 28% as development activity declines.
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