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Back to Basics The resurgence of real wood decking
tTt"u TRoUBLED ECoNoMY has driven I. down the North American residential decking and railing market 407o,from $4.6 billion in 2006 to $2.8 billion in 2009, according to a new Pri ncipia Partners study.
The most noticeable trend during the three-year slide has been wood decking regaining lost market share from synthetics, apparently driven by demand elasticity due to lumber deflation, while petroleum-based synthetics have experienced significant raw material price escalation.
"Lumber prices are at all-time lows, and the gap between the cost of pressure treated lumber and composites is the highest it's ever been," notes Dick Gauthier, Universal Forest Products.
Wood decking and railing have steadily lost market share to synthetics since the introduction of composites more than 20 years ago, based on performance and maintenance benefits. Wood's market share hit a low in 2007, maintained its position in 2008, and reversed in 2009.
Wood decking, says Allweather Wood's Rick Danielson, "is competitively priced, and consumers are more price conscious. Typical retail for treated wood decking is $1.00 to $1.10 per lineal foot. Non-wood products are about $1.65 and up. Also, the higher the price, the greater the customers' expectations."
McFarland Cascade's Greg Phillips agrees that the "resurgence of treated wood decking sales as a percentage of decking surface sales is directly connected to the low-priced lumber market. In this tough economy, people still want to enjoy outdoor living, so they are turning to more economical solutions. As the economy improves, we suspect maintenance issues will likely overcome the initial cost advantage of pressure treated lumber, though wood will always be a big part ofdeck surface sales."
Product failures by composites haven't helped. "We have noticed a slight change towards wood decking or forms of wood decking," says Northern California dealer Rick Zaslove. "With the class action claims and composites not performing as expected, Golden State Lumber and Sierra Point Lumber have noticed some of our customers looking for real wood decking that perform well to many weather conditions. Hardwood decking like ip6 and Clear and Deck Heart redwood decking products seem to fit this need best. [Composite manufacturersl have made some major changes in their product lines, and we will continue to support their efforts."
In addition, "the new'heat treated' wood dccking products are making sclmc hcadway." says dealer Gene McKinncy, Tindells', Knoxville. Tn. "Thcy arc real wood, stron-ger. stitfer, less expensive. and install like any other wood deck. We stock and sell this product and are having some success."
Next generation preservatives are also giving ii boost to good. old pressure treated wood decking. "The quality demands of the big boxes regarding pressure treated lumber are also the highest they've evcr been," ofl'ers UFPI's Gauthier. "So it's hardcr to disparage pressure treated since thc quality is pretty -tood today."
Dennis McWhirter, E,xteriol Wood, Washougal. Wa.. asrees wood decking has never been bettcr. "With the advancement and durability ol' today's stains and sealers. consurlrcrs are moving back to the tried and true wood products: cedar and trcated decking," McWhirtcr says. "We are seeing rcncwcd intcrcst in the use of tropical hardwood for decking. as wcll. Thcsc products are being used in both commercial and residential applications. where the consumer is looking fbr something that makes a staterncnt. Although there is slightly morc maintenance with this product, the wow factor is well worth it."
Although the synthetic decking cate,sory as a whole has lost share to wood, demand for cellular vinyl decking has been growing at a double-digit rate, due to the growing popularity of ultra-low maintenance decks among homeowners.
"The murkct hrrs two prirtrrt'y fcrrccs at work." says Principia's Steve Van Koutelen. "On onc end of the decking markct. consunrers are i'ighting money and budget issues and arc scaling back deck pro.jects. as well as using less expensive materials. Conversely, there is a high end of the nralkct llrat is lcss priec-sensitive. This scgmcnt is using new synthetic matcrials. and is driving the increase in dernand tbr cellular vinyl."
Cellular vinyl demand growth is at thc expense of polyolefin-based wood-plastic composite (WPC) decking. "Composite decking is losing rnarkct share to wood on the low end iind losing market share to cellular PVC on the high end," Van Kouteren says. "Total value tbr WPCs and ccllular vinyl is estimated at about $725 million, or 26Vc of the decking and railing market in 2009. Total North American demand tbr cellular vinvl in residential decking grew frorn about $5 million in 2004 to over $95 rnillion in 2009."
About 2.5 million decks were built on residential structures in 2009. and over 90olc are on existing homes as part oi l remodeling project or replaccmcnt (R&R) of an existing deck. Job losscs. tight credit, devalued homes. the inability to tap into home cquity to finance home irnprovement projccts. lnd leeold lor.rs in consumer cclnfidence combined to push decking anil railing demand back to levels unseen since the early 2000s.
The future is brighter for decking and railins. as homeowner desire tbr quality leisure time and outdoor living in thc backyard or front porch of thc home is part of the fabric of American living. An increase in housing starts and modest growth in R&R activity should increase the demand for decking and railing, on a value basis, about 10o/o in 20 l0 from its bottom in 2009. About 67o <tf the growth will result from volume growth and another zlTc from product mix and a slight recovery in wood prices. Pent-up demand from consumers will help support decking and railing growth in 20 10. Total decking and railing demand is expectcd to increase tiom $2.8 billion in 2(X)9 to $3.1 billion in 2010.
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