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Global engineered wood products market forecast

In its latest report, Technavio covers the market outlook and growth prospects of the global engineered wood products market for 2016-2020. The market is further categorized into four product segments, including I-beams, glulam, laminated veneer lumber (LVL), and others.

The I-beams segment dominated the market with more than 36 per cent of the overall market share in 2015.

“The production of engineered wood products is growing at an impressive CAGR [compound annual growth rate] of over 26 per cent. Engineered woods products are gaining popularity over hardwood owing to their sustainability,” said Chandrakumar Badala Jaganathan, a lead textile, fiber, and composites research expert from Technavio. “Various factors such as stringent regulations and rapid deforestation are likely to drive innovations in manufacturing engineered woods, decreasing the overall cost of production.”

Technavio’s research study segments the global engineered wood market into three regions: Europe, the Middle East and Africa (EMEA); North America; and Asia-Pacific (APAC).

EMEA: 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 per cent over the forecast period. The engineered woods products market has increased remarkably in EMEA since 2005. Currently, most of the production in Europe is consumed within the region.

The consumption of glulam is expected to double between 2016 and 2020. The majority of the glulam in the region is produced in Germany, Austria, and Finland.

Most of the production is sold in regional markets. However, Finland exports about 65 to 70 per cent of its production to Japan. Italy was the largest importer during the 2000s. However, imports have declined in recent years owing to the economic downturn.

The primary markets are in Central Europe. These markets are projected to grow well during the forecast period, and many sawmills have already extended their finger-joining capacity in recent years.

North America: construction sector to boost demand

The production of engineered wood products in North America is expected to grow at a CAGR of over 26 per cent by 2020. The construction of non-residential buildings in the Americas has grown considerably since 2010 and an estimated 35 per cent of the construction is wood framed, making the U.S. one of the major markets for Canadian forest products. Moreover, the residential construction segment in North America is expected to grow rapidly as the U.S. housing market recovers from its prolonged slump.

Canada is one of the leading producers and exporters of softwood lumber. Softwood lumber accounts for almost 25 per cent of Canada’s forest product exports in terms of value. The U.S. is the chief export market for Canada, where softwood lumber is used to build houses.

APAC: increased spending on housing and furniture to boost growth

Production of engineered wood products in APAC is predicted to grow at a CAGR of approximately 25 per cent. The construction market in APAC is developing fast, owing to factors such as increased per capita disposable income and resulting in an increase in spending on housing and furniture.

Although the price of American timber is rising in some markets due to the growing demand, the volatility of prices for regionally-grown timber, especially in China, poses a challenge to wood producers in this region. 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.

“Manufacturers are focusing on providing the products regionally, rather than exporting,” Chandrakumar said.

Technavio analysts employ primary and secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, as well as in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.