The global market for engineered wood products is set to grow at a compound annual growth rate (CAGR) of more than 26% over 2016 to 2020, according to Technaavio, a market research company.
Of the four product segments: I-beams, glulam, laminated veneer lumber (LVL) and others, I-beams would dominate the market, acounting for more than 36% of the overall market share in 2015.
“Engineered wood products are gaining popularity over hardwoods owing to their sustainability. Various factors such as stringent regulations and rapid deforestation are likely to drive innovations in manufacturing engineered woods, decreasing the overall cost of production,” said Chandrakumar Badala Jaganathan, a researcher from Technavio.
The study also categorised the engineered wood market according to APAC, EMEA and North America.
APAC: Increased spending on housing and furniture to boost growth
The production of engineered wood products in APAC is predicted to grow at a CAGR of approximately 25%. The construction market in APAC is developing fast due to factors such as increased per capita disposable income, which has resulted in an increase in spending on housing and furniture.
Although the price of American timber is rising in some markets owing to the growing demand, the volatility of prices of regionally-grown timber, especially in China, poses a challenge to the wood producers in APAC. Furthermore, substitutes such as plastic laminates and foils, which are similar to wood, are likely to intensify the threat. The non-wood flooring sector is also gaining popularity.
EMEA: The largest market for engineered wood products
The production of engineered wood products in EMEA is expected to grow at a CAGR of more than 29% over the forecast period. Since 2005, the engineered woods products market has increased remarkably in EMEA. Currently, most of the production in Europe is consumed within the region, primarily in Central Europe. These markets are projected to grow well during the forecast period, and many sawmills are already extending their finger-joining capacity in the recent years. Finland is the exception, exporting almost 70% of its engineered wood products to Japan. Italy was the largest importer during the 2000s, but imports have declined in recent years due to the slowdown in economy.
The consumption of glulam is expected to double between 2016 and 2020, with majority of the glulam in the region produced in Germany, Austria, and Finland.
North America: Construction sector to boost demand
North America’s engineered wood output is expected to grow at a CAGR of over 26% by 2020. Since 2010, the construction of non-residential buildings in America has grown considerably – an estimated 35% of the construction is wood-framed, making the U.S., one of the major markets for Canadian forest products.The residential construction segment in North America is also forecast to grow rapidly on the back of a recovering U.S. housing market.
Canada is one of the leading producers and exporters of softwood lumber, accounting for 25% of the country’s total forest products exports in value terms. The US is Canada’s chief buyer, where softwood lumber is used to build houses.
Source: Business Wire