IndustryIndices_DWM

Volume 13, Issue 2 - March 2012

Industry Indices

RESEARCH
U.S. Demand for Composite and Plastic Lumber to Reach $5.4 Billion in 2015
Demand for wood-plastic composite and plastic lumber in the United States is projected to advance more than 13 percent per year to $5.4 billion in 2015, creating a market for 2.6 billion pounds of plastic. Wood-Plastic Composite and Plastic Lumber is a new study from the Freedonia Group Inc., a Cleveland-based industry market research firm. The study says advances will be driven by a rebound in construction expenditures from a depressed 2010 base and growth will be further boosted by increasing consumer demand for building products made from composite and plastic lumber, instead of more traditional materials, such as natural wood.

According to the study, decking, which was the leading application for composite and plastic lumber in 2010, will experience the most rapid demand advances through 2015. Among other applications, moulding and trim, and doors and windows are expected to post the most rapid demand gains through 2015. Homeowners are expected to install doors and windows made from cellular PVC and composite lumber because of their resistance to rotting and resemblance to natural wood. Demand for composite and plastic lumber in landscape and outdoor products, fencing and other applications will also be promoted by increasing consumer recognition of the performance properties of these materials, according to the announcement.

In addition, demand for wood-plastic composite lumber is expected to post more rapid gains than that for plastic lumber through 2015, advancing more than 16 percent annually to $2.5 billion. Gains will be driven by ongoing consumer interest in composite lumber as a substitute for natural wood products in such applications as decking and fencing, according to the announcement.

The study also reports that plastic lumber demand is expected to rise nearly 11 percent per year to $2.8 billion in 2015, with gains spurred by rising consumer interest in the material because of its low maintenance properties. The efforts of manufacturers to create plastic lumber with more realistic woodgrain textures and surfaces will also support demand, says the report.

More Cities Join the List of Improving Housing Markets
The list of housing markets showing measurable improvement expanded by 29 metro areas in February to include a total of 98 entries on the National Association of Home Builders (NAHB)/First American Improving Markets Index (IMI). Thirty-six states are now represented by at least one market on the list.

The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. The February index adds some metropolitan areas that have been particularly weak; this is due to the fact that the IMI measures improvement from a bottom, and some of the hardest hit markets are showing signs of coming off of extreme lows. New entrants include Miami, Boston; Detroit; Kansas City, Mo.; Portland, Ore.; Memphis, Tenn.; and Salt Lake City.

Seven markets dropped from the NAHB/First American Improving Markets Index in February as they experienced softening house prices. These metros include San Jose, Calif.; Washington, D.C.; Kankakee, Ill.; New Orleans; Worcester, Mass.; Jackson, Miss.; and Sherman, Texas.