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 85-86 workers, and generates $37 million annually.

    • The plywood and engineered wood product manufacturing industry consists of about 1,000 firms that employ about 86,300 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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Mar 27, 2024 - Industry Growth Softens
                                    • The plywood and engineered wood product manufacturing industry is expected to experience weaker sales growth in 2024 after a softening of demand in 2023 and some solid gains in the years during the pandemic. The industry’s year-over-year sales rose 8.7% in 2020, 16.2% in 2021, and 7% in 2022 before falling to 2.8% growth in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales are projected to rise 1.8% in 2024, then see average annual growth of about 3.8% through 2027, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                    • New single-family home sales fell 0.3% month-over-month but were up 5.9% year-over-year in February 2024, according to the US Department of Commerce. While a rise in interest rates in February slowed new home sales, the overall market is gaining ground amid tight inventories of existing homes for sale, according to Reuters. Lower home prices may also lure buyers; the median new home sales price in February was $400,500, down 3.5% from January 2024. February’s median home price was also the lowest in two and a half years. To attract buyers, builders are reducing home sizes to make them more affordable while offering discounts and other incentives.
                                    • Home builder confidence improved in March amid a lack of existing homes on the market and moderating mortgage rates that remained below 7%, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose three points to 51 in March 2024, which marked the highest HMI reading since July 2023 and the fourth consecutive month of strengthening confidence. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The NAHB said that while lower interest rates have improved affordability and drawn more buyers back to the market, 2024 could bring supply-side headwinds, including shortages of workers, materials, and available lots. Home builders are significant buyers of major household appliances.
                                    • The total value of nonresidential building construction starts decreased a seasonally adjusted 16% in February from January, according to Dodge Construction Network. The drop was led by a 28% decrease in manufacturing projects. Commercial construction starts were off by 3% in February amid fewer warehouse starts, and institutional projects saw a 19% decline in starts amid weakness in the transportation and education buildings segments. Dodge Construction Network chief economist Richard Branch said, “Construction activity was hit hard by higher rates and more restrictive credit standards. Starts struggled over the past several months as the lagged effect of higher rates impacted projects moving forward through the planning process. Additionally, the significant deficit of skilled labor led to further delays – especially in the manufacturing sector. While optimism should prevail in the second half of the year as the Federal Reserve begins to cut rates, some sectors like commercial, will make little headway over the remainder of the year.”
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