Residential Wood Panels

Report Overview

Featuring 20 tables and 6 figures – now available in Excel and Powerpoint! Learn More

This study examines the US market for wood panels in residential buildings. This includes structural boards (oriented strand board (OSB) and softwood plywood) as well as nonstructural boards:

• hardboard
• hardwood plywood
• insulation board
• medium density fiberboard (MDF)
• particleboard
• low density fiberboard

Study Scope

The residential market includes new and improvement and repair applications for:

• roofing (e.g., sheathing, decking, framing, trim)
• flooring (subflooring and finish flooring)
• wall sheathing
• cabinets (e.g., cabinet boxes, drawers, drawer fronts, doors)
• siding
• doors (and, though a negligible portion of the market, windows – primarily hurricane-proof storm types)
• interior paneling
• other construction applications, including moulding and trim, stairways, concrete formwork, temporary shelters, decks, and porches

Residential buildings are structures designed primarily for human habitation. They include:

• single-family detached houses
• single-family attached houses (e.g., townhouses)
• apartment or condominium buildings with multiple dwelling units
• manufactured homes, which are housing units constructed on a permanent chassis with wheels for on-road transportation to the site at which the unit will be placed

The market can also be considered in terms of project type:

• New construction involves the creation of a new building or structure on previously unimproved land or on land available after the demolition of a previous building or structure on that site. If, however, the building or structure is being attached to an existing structure, the construction would be considered an improvement and not new construction.
• Improvements include additions, alterations, conversions, expansions, reconstruction, renovations, rehabilitations, and major replacements (such as the complete replacement of a roof or heating system) to an existing building or structure. Expenditures on improvements are classified as construction expenditures.
• Maintenance and repairs are occasional or periodic expenditures that are intended to forestall the deterioration of an existing building or structure. They are less extensive in scope than a major rehabilitation of the building or structure. Maintenance and repair spending is not classified as construction expenditure, though it can be added to improvement spending to comprise improvement and repair expenditures.

Historical data for 2009, 2014, and 2019 and forecasts to the years 2024 and 2029 are provided for wood panel shipments and demand in square feet and current dollars. Data in square feet are actually volumetric measurements, since the various types of wood panels are each associated with a standard thickness. These standard thicknesses (as most commonly accepted within the industry) are:

• 1/8 inch - hardboard
• 3/8 inch for OSB and softwood plywood
• 1/2 inch for insulation board and low density fiberboard
• 3/4 inch for particleboard, hardwood plywood, and MDF

Data for each board type are provided in terms of that product's standard thickness. In order to improve the comparability of wood panel demand in volume terms across different board types, data are converted to a 3/8 inch basis. These measures are used in the market and regional sections, as well as for product aggregations in the product sections. Unless another thickness is specified, square feet measurements in the study are on a 3/8 inch basis.

Wood panels used as a component of other wood panel products, such as particleboard used to make plywood, are counted separately and considered to be engineered wood for the purposes of this study. Although this results in some double counting of wood panel demand, this treatment is in line with that used within the industry.

How will the COVID-19 coronavirus impact the global economy? The Freedonia Group is tracking recent developments and analyzing their impact in an easy to follow Economic Impact Tracker.

Demand for wood panels in residential construction is forecast to increase 0.9% annually through 2024 to 28.3 million square feet, as measured on a 3/8 inch basis, despite a significant drop in 2020 due to the impact of the COVID-19 pandemic, which is expected to cause new home construction to fall.

However, demand will return to growth beginning in 2021 and continue to expand through 2024, driven by:

• a rebound in new single-family home construction
• rising spending on home renovation projects
• increased specification of wood panels in a number of construction applications, including finish flooring installed in new homes and as wall sheathing

Roofing to Remain Leading Residential Wood Panel Application

Roofing accounted for nearly a third of residential wood panel demand in 2019 and is expected to remain the leading application through 2024. An increase in roofing renovation projects both to fix damaged roofs and to strengthen existing roofs will support demand gains. OSB is the dominant residential roofing wood panel product and is expected to increase its market share through 2024 at the expense of softwood plywood because of its superior durability and lower cost.

Rising OSB Use to Boost Residential Wood Panel Demand

OSB is the leading residential wood panel product, as it is used in a number of structurally essential applications, including subflooring, roofing, wall sheathing, and siding. OSB is expected to see increased use in many of these applications because of its:

• high strength
• durability
• limited board imperfections
• resistance to impact and fire
• good thermal and acoustic properties

Subflooring is the only application where OSB products are maturing, as they have already taken much share from softwood plywood. In subflooring applications, softwood plywood retains share because it is less likely to retain water than OSB.

Though More Volatile than Renovation, New Construction Will Support Gains

New home construction fell off in the first half of 2020 as the COVID-19 pandemic exacerbated what was already a cyclical downturn in housing construction, leading to corresponding sharp drops in wood panel demand. Home renovation supported the wood panel market, as homeowners undertook home improvement projects they may not have had time to facilitate before. Following a strong rebound in 2021, the large new construction market is once again expected to sustain demand growth for wood panels used in residential construction.