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
Jul 25, 2024 - Home Builder Sentiment Drops
- Home builder confidence in the single-family market dropped in July to the lowest level since December 2023 amid high mortgage rates and elevated builder financing costs, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell one point to 42 in July 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The HMI survey also showed that 31% of builders have reduced home prices to lure potential buyers off the sidelines, although the average price reduction of 6% remained unchanged for the thirteenth consecutive month. New home sales are a key driver of appliance demand.
- 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.
- New single-family home sales fell 0.6% month-over-month and 7.4% year-over-year in June 2024, according to the US Department of Commerce. The June drop in new home sales marked a seven-month low as high mortgage rates and home prices weaken demand for new homes, according to Reuters. The median new home sales price in June was $417,300, up 2.5% from May 2024 but the median new home price was down 0.7% year-over-year. To attract buyers, builders are reducing home sizes to make them more affordable while offering discounts and other incentives.
- Total nonresidential building construction spending is projected to rise 6% in 2024 over 2023, according to FMI’s third-quarter 2024 North American Engineering and Construction Outlook. With growth of 28%, public safety will lead 2024 nonresidential building construction, followed by manufacturing (21%), educational (7%), and religious (7%). Some other segments of the nonresidential building sector face headwinds. Commercial construction spending is expected to decline 7% in 2024 amid weaker demand for warehousing space, high interest rates, and tighter lending standards. Lodging construction spending is forecast to drop 6% as consumer budgets tighten and hotel occupancies wane, especially near the market's lower tier. Stubbornly high office vacancies will continue to weigh on new office construction, which is projected to see flat spending in 2024. Despite high interest rates, single-family construction spending is forecast to rise 7% in 2024 as homebuilders reduce home sizes to improve affordability. Spending for multifamily is expected to decline by 1% in 2024 after projects in development peaked at 1 million units in mid-2023. Home improvement project spending will rise 4% in 2024 as homeowners primarily focus on maintenance and repairs amid high materials costs and interest rates.
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