Plywood: Softwood & Hardwood

Report Overview

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This study examines the US market for plywood, an assembly of three or more layers of wood veneer sheets joined by an adhesive with the grains of adjacent sheets at right angles for added dimensional stability. Plywood is divided into two main categories:

• softwood structural boards
• hardwood nonstructural boards

Scope and Summary

Markets for these products encompass construction and industrial uses. Construction uses include:

• roofing (e.g., sheathing, decking, framing, trim)
• flooring (subflooring and finish flooring)
• wall sheathing
• cabinets (e.g., cabinet boxes, drawers, drawer fronts, doors)
• siding
• other construction applications, including moulding and trim, stairways, concrete formwork, temporary shelters, decks, interior paneling, and porches

Industrial applications include:

• furniture and fixtures (e.g., ready-assemble household furniture, office furniture, wood partitions, shelving)
• engineered wood products, including the manufacture of plywood, I-joists, and rim boards
• material handling products (e.g., pallets, crating, packaging products, bins, tanks)
• transportation equipment (e.g., recreational vehicles, boats, trucks, trailers, buses, rail cars)
• other manufactured goods, including signs, appliance cabinets, trophies and plaques, crafts, sports and exercise equipment, musical instruments, and toys and games

Historical data for 2009, 2014, and 2019 and forecasts to the years 2024 and 2029 are provided for plywood shipments and demand in square feet and current dollars. Data in square feet are actually volumetric measurements since softwood and hardwood plywood are each associated with a standard thickness: 3/8 inch for softwood and3/4 inch for hardwood.

Data for each plywood type are provided in terms of that product’s standard thickness. In order to improve the comparability of plywood demand in volume terms across different board types, data are converted to a 3/8-inch basis. These measures are used for product aggregations.

The US market for plywood is projected to expand at a 0.5% annual rate through 2024 to 14.9 billion square feet on a 3/8-inch basis, a substantial deceleration from the 2014-2019 period. Demand in value terms will climb 1.7% annually to $6.7 billion in 2024. Despite longer term gains, plywood demand is forecast to fall in 2020 due to the impact of the COVID-19 pandemic, which is expected to cause:

• a decline in new home construction
• a heavy drop in commercial construction spending as many businesses were forced to shut down or operate at reduced capacities
• a fall in the production of wood furniture, engineered wood products, and other manufactured goods

Demand will return to growth beginning in 2021 and continue to expand through 2024, principally driven by increased spending on home renovation projects and rising manufacturing output.

Industrial Market to Be a More Significant Driver of Demand Gains than for Other Products

The industrial market is expected to account for more than half of all plywood demand gains through 2024. Despite stagnation in production of furniture – the largest application for plywood in industrial markets – suppliers will benefit from:

• increases in overall manufacturing shipments, which will boost use of material handling products such as pallets and crates
• rising production of transportation equipment like boats and trailers

Plywood to Lose Share to Oriented Strand Board in Multiple Applications

Plywood accounts for the second largest share of wood panel demand behind oriented strand board (OSB). However, plywood is expected to lose share through 2024 in applications where softwood plywood competes with OSB – such as roofing and wall sheathing – because OSB typically offers similar performance at a lower cost. Plywood will continue to compete successfully in:

• applications where superior performance is of greater importance
• more visible applications because of its superior aesthetics and consumer perception that it is of higher quality than composite boards

Construction Market Is Expected to Grow Despite Industry Weakness

In the construction market, plywood will find increased use in flooring applications:

• For finish flooring, rising consumer preferences for hard surface flooring over alternatives such as carpet will support hardwood plywood demand.
• Demand for plywood used as subflooring will be supported by its ease of installation and compatibility in a variety of building types.

Demand for plywood for roofing and wall sheathing, on the other hand, is expected to decline due to competition from less expensive OSB as well as from non-wood materials.