SOURCE: Freedonia Group

October 11, 2005 10:18 ET

US Wall Coverings Demand to Reach $2.4 Billion in 2009

CLEVELAND, OH -- (MARKET WIRE) -- October 11, 2005 -- Demand for wall coverings is projected to advance 4.3 percent annually from a weak 2004 base to $2.4 billion in 2009. Consumption has been negatively impacted for most of the last ten years due to competition from paints and coatings, long term weakness in the wallpaper sector, a severe cyclical downturn in manufactured housing and a weak nonresidential building market. Going forward, however, the basic demand fundamentals for wall coverings will be much improved. In particular, the manufactured housing sector is expected to recover, as will key segments of nonresidential building. These and other trends are presented in Wall Coverings, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.

Demand for ceramic wall tile is projected to increase over 4 percent annually through 2009. Ceramic tile represents the largest segment of the industry, due to the broad base of market sectors in which these products are used. Unlike some products, which are heavily dependent upon a single market, ceramic tiles are used widely in both residential and nonresidential markets, and in both new construction and repair and improvement projects.

Wallpaper demand will experience a long-awaited recovery after ten years of steady declines, due to cost, difficulty of use and changing style trends. The development of new products, such as easily strippable, low-emission and mold-resistant products, will make wallpaper more environmentally acceptable and easier to use. Products such as vintage wallpaper, digitally designed papers, custom papers, couture papers and mural papers will also help to reinvigorate the segment.

Demand for wall panels will benefit from growth in nonresidential construction, a primary market for simulated wood grain, veneer and solid wood panels. In addition, a rebound in manufactured housing and the development of new styles of laminated wall panels will also boost gains. Finished gypsum board demand is almost entirely dependent upon the manufactured housing industry. As manufactured housing recovers, gypsum board demand will also post strong gains. Imports have a significant impact on the US wall coverings industry. Overall, imports accounted for 45 percent of total demand in 2004, an increase from 31 percent in 1994. By 2009, imports will account for nearly 50 percent of demand.

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