SOURCE: The Freedonia Group, Inc.

October 22, 2007 16:30 ET

US Demand for Composite and Plastic Lumber to Reach $5.5 Billion in 2011

CLEVELAND, OH--(Marketwire - October 22, 2007) - Demand for wood-plastic composite and plastic lumber is projected to advance 10 percent per year through 2011 to $5.5 billion. These alternative lumber materials are expected to continue to penetrate the building materials market at a rapid pace, particularly in decking applications. Both composite and plastic lumber benefit from their performance characteristics, such as durability, weatherability, low maintenance requirements and low life cycle cost. Demand for these products will also be driven by increasing consumer and contractor familiarity, a widening distribution network and product improvements that enhance appearance. Ongoing interest in "green" building products will bolster use of composite and plastic lumber made with recycled content. These and other trends are presented in "Composite & Plastic Lumber," a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

With respect to materials, wood-plastic composites will fare better than pure plastics. Demand for wood-plastic composite lumber will grow 14 percent per year compared to a seven percent growth rate for plastic lumber. Composite lumber growth will be fueled primarily by strong demand for the material in decking, which is by far the largest application for composite lumber. Rapid expansion in window and door applications, as well as in smaller niche applications (e.g., porches, site and leisure furniture, etc.), will also boost demand. Growth in demand for plastic lumber will decelerate from the rate posted in the 2001 to 2006 period, a result of direct competition from wood-plastic lumber. Significant applications for plastic lumber include molding and trim, as well as fencing and decking.

Among the major applications, windows and doors are anticipated to post the fastest gains through 2011 (albeit from a small base). Decking applications are projected to see strong gains, continuing to increase their relative share of the composite and plastic lumber industry. By 2011, decking will be the largest end use for these alternative building materials, accounting for 43 percent of total demand. Molding and trim will remain a key market for composite and plastic lumber, but will see below-average growth through 2011. Increasing market maturity in the plastic lumber segment will limit growth, as will a weak new housing environment. Fencing applications will see strong, although below-average, gains due to increasing maturity in the plastic lumber segment.

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