Report Overview
19th Edition
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This study analyzes US demand for siding by material, market, and region. Siding is defined as exterior cladding for buildings. Excluded are such ancillary products as soffit and trim.
The siding materials are broken out by:
vinyl
fiber cement
stucco (e.g., three-coat, one-coat)
engineered wood, including oriented strand board (OSB), plywood, and hardboard
brick (standard and modular)
metal panels (excluding aluminum and steel siding with specific limited, legacy applications)
concrete (non-loadbearing concrete bricks and precast concrete panels)
small volume siding materials, including:
EIFS (exterior insulation and finish systems)
manufactured and quarried natural stone
natural wood
polypropylene
composites (e.g., glass-reinforced polymer and polystyrene foam; polyethylene and aluminum; fly ash, polyurethane, and glass fiber; polymer resin, inorganic materials, acrylic colorants; sawdust and HDPE; bamboo and plastic; fiberglass and natural stone)
steel and aluminum, other than metal panels
plastic and vitreous panels
opaque curtain wall
Commercial products such as curtain wall and storefronts that can be seen through are considered windows for purposes of this report and thus excluded from coverage. Opaque curtain wall is considered to be a siding product and is included in the small volume materials category. Also excluded is exterior plaster – which is made from a mixture of lime, plaster of Paris, and water.
The major market segments analyzed are:
new residential
residential renovation
new commercial
commercial renovation
The residential building market is further segmented by housing type:
single-family
multifamily
manufactured housing
Excluded from the definition of residential buildings are housing units located in a structure whose primary purpose is something other than habitation. Thus, a small living space contained in a larger retail facility would be classified as part of a retail building and not a residential building.
The commercial building market is also broken out by building type:
institutional
retail and lodging
office
industrial
other commercial buildings (e.g., amusement parks and recreational facilities, transportation terminals, government facilities for administration and public safety, courthouses, civic centers, post offices)
Demand for siding is also broken out for US geographic regions and subregions.
Historical Trends
Siding demand tends to follow trends in building construction activity, especially in the residential market. For instance, siding demand is strongly correlated with new home construction, as siding is included on virtually every new house, and siding is installed at the time of the home’s construction.
Demand for siding also follows trends in new commercial building, though not as closely as the residential trends, as there are some commercial buildings (warehouses and other industrial buildings, for instance) that use no siding products.
Siding demand is also impacted by trends in home renovation activity, as the residential re-siding market is the leading application for siding. Homeowners looking to upgrade the appearance of their homes may do so in a number of ways that promote siding demand:
For example, some siding materials – namely vinyl and natural wood – will necessitate replacement over time.
Additionally, some homeowners may seek to increase the value of their homes by opting for higher quality siding products that have fewer maintenance requirements.
Similar to new construction activity, the trend is less profound in the commercial market, as renovation projects are more commonly focused on utility than on exterior aesthetics.
Demand by Market
Demand for siding is forecast to grow 1.4% annually to 103 million squares in 2025. The residential market accounts for the majority of siding demand – 78% in 2020 – in any given year, so surging housing starts and strong renovation activity in 2020 and 2021 boosted siding demand to elevated levels in 2020, leading to a more modest forecast through 2025. Though relatively slow, growth going forward will be supported by continued renovation activity.
The commercial market accounts for a similar share of siding demand in value and area terms (22% in 2020). Although the commercial market will see healthy growth from 2022 to 2025 as a variety of commercial buildings are constructed or remodeled, average growth will be slow as the significant losses of the 2020-2021 period are recovered.
Pricing Patterns
In this study, prices for siding materials are measured at the manufacturers’ level, so thus exclude any distributor or retail markups. The cost of raw materials is the key determinant of siding price levels. For example, the cost of vinyl siding, which is manufactured from a petrochemical plastic resin, is affected by changes in the price of feedstocks such as crude petroleum or natural gas.
The price of siding within a given material category is also determined by its quality classification. Performance factors are often key to this classification. For example, whether vinyl siding is classified as an economy, standard, or premium product depends on its rigidity, resistance to fading, thickness, and ease of installation.
Aesthetics can also play a role in product classification; premium vinyl siding is offered in more vibrant colors because it is made with specialty coatings and treatments that make it more expensive than standard grades.
VIDEO
Demand for siding in the US is projected to increase from an elevated 2020 base at an average rate of 1.4% annually through 2025 to 103 million squares. All gains are expected in the early part of the forecast, as housing construction and residential renovation remain high following strong spending that began in the second half of 2020. Siding sales to the this market will weaken in the later part of the forecast as residential construction moderates from these highs, but a strengthening of commercial construction will provide opportunities during that time.
Over the long term, market growth in value terms will come almost equally from increases in volume demand and in average prices, which will result from higher costs for individual siding types and a shift in toward higher value products. However, as manufacturers work to create products with enhanced durability, replacement demand will be restrained.
Product Improvements Allow Vinyl to Avert Further Share Losses & Remain Leading Material
Vinyl has long been the most commonly used siding material in the US, particularly in the Northeast and Midwest regions, and is expected to retain that leading position based mainly on its low cost and ready availability. However, other materials – primarily fiber cement – continue to erode the market base for vinyl siding, in part because many consumers are looking for ways to differentiate the appearance of their homes and to improve the curb appeal through installation of siding that looks more natural than vinyl.
In order to maintain relevance in the midst of these design trends, vinyl siding manufacturers continue to improve the appearance of these products. Additionally, they can benefit from marketing their products in new ways that appeal to design trends that call for unique aesthetics. For example, they can promote installation of vinyl products as vertical (rather than horizontal) panels to provide visual contrast and a more high-end look.
Fiber Cement Siding to Continue to Gain Market Share in Residential Market
Fiber cement is expected to gain market share – primarily at the expense of engineered wood – due to its superior durability, ability to create texture, and improvements to product aesthetics. Fiber cement will also take share from brick siding with the growing popularity of lightweight imitation brick products. Additionally, the eco-friendly nature of fiber cement siding will appeal to consumers who prefer to use green products.
The bulk of these gains will come from single-family homes, as major fiber cement manufacturers increasingly tailor their products to this market, where the margins are higher and aesthetics are more important. Additionally, the development of improved imitation stucco siding made from fiber cement will offer further opportunities for gains, as the stucco aesthetic is popular in regions of the country with strong construction industries, primary the South and Southwestern areas of the US.