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Double-Digit Growth for Composite & Plastic Lumber

10 March 2006

Demand for wood-plastic composite and plastic lumber in the US is forecast to expand at a double-digit pace through 2009 to $3.8 billion, according to a new study by Freedonia.

Advances will result from increasing market penetration of these alternative building materials, particularly in decking applications, which are expected to account for more than one-third of value demand in 2009. Performance characteristics of these materials, such as high durability and low maintenance requirements, will cause more people to adopt them for their decking projects. Advances for composite decking will also be driven by increasing consumer and contractor familiarity, a widening distribution network, and product improvements that enhance appearance.

Plastic lumber will benefit from growing use in fencing installations, while wood-plastic composites will achieve rising penetration in newer applications, such as fencing, window and door components, and railroad ties. Demand for both composite and plastic lumber will be aided by consumers’ efforts to reduce maintenance associated with construction materials.

Moulding and trim was the largest end use for composite and plastic lumber in 2004, at about 45 percent of the total. Through 2009, demand for composite and plastic lumber in moulding and trim applications is forecast to rise at a healthy pace to $1.3 billion, almost all of which will be plastic lumber. Gains will be slower than for most composite and plastic lumber applications, a result of the relative maturity of this market, but will be significantly faster than those for wood moulding and trim materials.

Among the major product categories, windows and doors applications are anticipated to post the fastest gains through 2009 (albeit from a small base), with demand expected to exceed $200 million. As with other applications, composite window and door components are making inroads against wood, metal and plastic materials because of their lower maintenance requirements and similarities to wood. Other applications such as playground equipment, site and leisure furniture, hot tub cladding, porches and railroad ties will see above-average gains through 2009 as well (from small bases).

Residential building will remain the largest market for composite and plastic lumber over the forecast period. Although prospects for new home construction are expected to weaken through 2009, these materials will achieve growth through increasing market penetration at the expense of traditional materials such as wood and metal. Gains in the much smaller non-residential building market will be enhanced by an expected recovery in construction activity in the office and commercial segments. In non-building markets, composite and plastic lumber will also see strong growth, bolstered from healthy increases in the construction spending through 2009.

This new Freedonia industry study, Composite & Plastic Lumber, presents historical US demand data (1994, 1999, 2004) and forecasts to 2009 and 2014 by material, application and market. The study also considers market environment trends and indicators, evaluates company market share and profiles leading producers.