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Trends in Composite Lumber

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Trends in Composite Lumber MARKET TRENDS AND OPPORTUNITIES FOR PLASTIC COMPOSITE PRODUCTS IN CONSTRUCTION CLMA BOARD MEETING October 2018 Home Innovation Research Labs ▪ Founded in 1964 as wholly-owned subsidiary of NAHB ▪ Independent, for-profit researchers assisting development and commercialization of new building technologies ▪ Engineering research & development ▪ Market & field research ▪ Laboratory testing ▪ #1 in green home building certification (NGBS) ▪ Building codes and standards developers ▪ Partners with ICC-ES to fast-track issuance of ESRs Purpose and Outline of Presentation 1. Review of building materials trends in new homes and remodeling 1. Decks & Porch Surfacing 2. Deck & Porch Railing Systems 3. Exterior Trim & Fascia 4. Fences & Privacy Walls 5. Siding & Exterior Finishes 6. Residential Roofing 7. New Home Construction Industry Trends 2. Discuss current and future market opportunities Annual Building Product Tracking Studies ▪ Home Innovation has been tracking annual materials purchases since 1995 ▪ Builder Practices Survey of 1,500 U.S. Builders ▪ Consumer Practices Survey of 100,000+ U.S. households ▪ Decades of custom market research, sponsored by hundreds of building materials manufacturers ▪ Support of development and launch of hundreds of new building products Decking Volumes in New Homes and Remodeling, by Material Type (2017) PVC & other plastics 24 Plastic composite 45 197 Other untreated lumber 42 About 1.2 billion square feet of outdoor decking was installed Redwood 100 on residences in 2017, ~85% for remodeling Cedar 122 Treated lumber 46 571 (Millions of Sq.Ft.) 0 100 200 300 400 500 600 700 New Homes Remodeling Source: Annual Builder & Consumer Practices Reports Decking Material in All New Homes, 2017 PVC & other Composite, plastic, 7% 37% Other, 2% Other untreated wood, 4% Treated Redwood, 3% wood, 38% Cedar, 9% Source: Annual Builder Practices Reports Shares of Decking Material in New Single Family Detached Homes 70% 60% 50% 40% 40% Treated Wood 35% Untreated Wood 30% Composite 20% PVC 17% 10% 7% 0% Source: Annual Builder Practices Reports Decking Material in Repair and Remodeling, 2017 PVC & other Other , 7% plastic, 2% Composite, 17% Treated Other wood, 50% untreated wood, 4% Redwood, Cedar, 9% 11% Source: Annual Consumer Practices Reports Shares of Raised Porch and Decking Material in Residential Remodeling 60% 50% 50% 40% Treated lumber 30% Untreated Lumber Composite 23% 20% PVC & Other Plastic 17% 10% 2% 0% 2011 2012 2013 2014 2015 2016 2017 Source: Annual Consumer Practices Reports Porch and Deck Railing Systems on New Homes and Remodeling, 2017 (millions of linear feet of railing) Treated wood 5.4 45.5 Untreated wood 3.5 18.1 Composite 12.4 Iron or steel 11.7 About 120 million linear feet of outdoor PVC & other plastic 7.2 hand railing is installed on U.S. homes per year (~1 billion feet of lineals) Aluminum 4.7 Other 0.0 20.0 40.0 60.0 New Homes Remodeling Source: Annual Builder & Consumer Practices Reports Deck & Porch Railing Shares in New Homes, 2017 Aluminum, 14% PVC & other plastic, 14% Iron or steel, 13% Composite, 12% Other untreated wood, 3% Masonry/concrete, 1% Redwood, 2% Glass Panel, 2% Cedar, 9% Treated wood, Steel cable, 2% 29% Other, 0% Source: Annual Consumer Practices Reports Deck and Porch Railing in New U.S. Homes 60% 50% Treated Wood 40% Untreated Wood Composite 30% PVC & Other Plastic 20% Aluminum Steel or Iron 10% Other 0% Source: Annual Builder Practices Reports Deck & Porch Railing Shares in Repair & Remodeling, 2017 Aluminum, 5% PVC & Other Plastic, 7% Treated Lumber, Other, 1% 45% Masonry/concrete, 1% Other untreated wood, 3% Redwood, 6% Cedar, Iron or 8% steel, 12% Composite, 12% Source: Annual Consumer Practices Reports Deck and Porch Railing in U.S. Home Remodeling 60% 50% Treated wood 40% Untreated wood Composite 30% PVC & other plastic 20% Aluminum Iron or steel 10% Other 0% Source: Annual Consumer Practices Reports Fences & Privacy Walls Installed in New Homes and Remodeling, 2017 (millions of LF) Wood Vertical Boards 138 771 Wood Rails or Timbers 272 Plastic or Composite 212 Chain Link 170 Iron or Steel 58 Concrete & Other 55 About 1.8 billion LF of fence Installed per year (8 billion SF) Brick or Block Aluminum Plastic or Composite = about 1.2 billion SF Stone - 100 200 300 400 500 600 700 800 900 1,000 New Homes Residential Remodeling Source: Annual Builder & Consumer Practices Reports Fence & Privacy Wall Trends in New U.S. Homes 80% 70% 60% Wood-Vertical Boards Wood Post with Rails 50% Chain Link or Wire 40% Iron or Steel 30% Aluminum Plastic or Composite 20% Stone or Brick 10% Concrete 0% Source: Annual Builder Practices Reports Fence & Privacy Wall Trends in New U.S. Homes (2nd Tier) 14% Wood-Vertical Boards 12% Wood Post with Rails 10% Chain Link or Wire 8% Iron or Steel 6% Aluminum 4% Plastic or Composite 2% 0% Stone or Brick Fence & Privacy Walls Installed in U.S. Home Remodeling 60% 50% Wood Vertical Boards Wood Rails or Timbers 40% Chain Link Iron or Steel 30% Aluminum Plastic or Composite 20% Stone Brick or Block 10% Concrete & Other 0% 2010 2011 2012 2013 2014 2015 2016 2017 Source: Annual Consumer Practices Reports Siding in New Homes and Remodeling, 2017 (millions of sq.ft.) Vinyl & Polymer 567 1,829 Engineered Wood 409 693 Fiber Cement 600 419 Stucco 443 281 Natural Lumber 110 580 Residential siding represents Metal & Other 495 about 7.5 billion sq.ft. annually Brick 347 179 Stone 260 209 0 500 1,000 1,500 2,000 2,500 3,000 New Homes Remodeling Source: Annual Builder & Consumer Practices Reports Your New Product Installs So Easily, Anyone Can Do It… ▪ Anticipate resistance from some skilled trades ▪ Demonstration is very important to selling ▪ Consider non-traditional users, like ▪ remodeling generalists ▪ handymen who welcome alternatives that don’t require special tools or training ▪ Consider do-it-yourselfers (prosumers, weekend warriors, etc.) Management Labor Deficit ▪ Recent Home Innovation study of ASHRAE members revealed that there is a deficit management levels of construction companies – not just skilled tradespeople ▪ The primary lack was project coordination and management ▪ The skills were particularly lacking a deep knowledge of construction (not engineering) need jobsite experience and maturity to anticipate issues ▪ Technologies/apps/software solutions are available, but only tech saavy younger generation inclined to use them ▪ Webinars to facilitate face-to-face contact ▪ Tracking software to communicate real-time with building team ▪ Communications apps THANK YOU Home Innovation Research Labs 400 Prince George’s Blvd |Upper Marlboro, MD 20774 P: 301.430.6194 | F: 301.430.6180 HomeInnovation.com.
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