SOURCE: Freedonia Group, Inc.

November 13, 2006 14:32 ET

U.S. Siding Demand to Remain at 117 Million Squares in 2010

CLEVELAND, OH -- (MARKET WIRE) -- November 13, 2006 -- Demand for siding materials is forecast to remain flat through 2010 at 117 million squares. Strong growth is expected in nonresidential markets, as industrial, commercial and office building activity recovers from a cyclical low in 2005. These gains will offset the decline in demand from the larger residential building market, which will be negatively impacted by a decrease in single-family home construction. The best growth will be in stucco EIFS and metal panels due to heavy use in the fast growing nonresidential sector. Fiber cement will gain share in the residential market. These and other trends are presented in "Siding," a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Vinyl siding will maintain its position as the leading type of siding in use, due to its competitive cost and established position of market dominance in the residential improvement and repair sector. Nevertheless, vinyl's total market share will begin to erode, reflecting the material's dependence on weak residential markets and growing competition from products such as fiber cement.

Fiber cement siding materials will continue to take market share from other products, and will post among the fastest gains through 2010, surpassing wood and brick in usage. These materials are still relatively new to the U.S. market, and are benefiting from their low cost, durability and appearance. Gains will slow markedly from the rapid growth registered from 1995 to 2005, reflecting the weak outlook for residential home building, the primary outlet for fiber cement siding.

Metal panels will post the fastest growth in demand through 2010, largely due to the forecast rebound in nonresidential building activity. The use of metal panel siding materials is almost exclusively dependent on commercial and industrial building activity, and as a result, demand declined sharply between 2000 and 2005, as nonresidential building weakened. Going forward, however, the release of pent-up demand for new nonresidential structures will greatly boost demand for metal panel siding. Stucco and related materials will also post positive gains in demand through 2010, primarily due to growing consumption of Exterior Insulation Finishing Systems (EIFS).

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