Engineered Wood Market Is Estimated To Witness High Growth Owing To Growing Construction Industry And Increasing Investments In Infrastructure Development
The Engineered Wood Market is estimated to be valued at USD 7.65 Billion in 2024, exhibiting a CAGR of 7.3% over the forecast period (2024-2031). The global engineered wood market is driven by rapid urbanization and growing construction industry across the globe. Furthermore, rising investments in infrastructure development projects especially in developing nations are further propelling the demand for engineered wood.
The global engineered wood market is primarily driven by rapid urbanization and growth in the construction industry worldwide. According to the United Nations, approximately 68% of the world population is expected to live in urban areas by 2050. This rapid urban migration is generating a huge demand for residential and commercial construction. Engineered wood finds wide application in the construction of floors, roofing, and other structural applications owing to its advantages over conventional wood such as moisture resistance and high strength. Moreover, governments across the globe are increasing investments in infrastructure development projects such as roads, rails, metros, etc. This is further accelerating the consumption of engineered wood in projects related to bridges, tunnels, and other civil construction activities. The rising disposable income and growing spending on construction and infrastructure development especially in emerging economies of Asia Pacific and Latin America is anticipated to propel the global engineered wood market over the forecast period.
Growth in Construction Industry Drives the Demand for Engineered Wood
The construction industry has seen strong growth over the past few years globally. As the world urbanizes at a rapid pace, there is increased need for new residential and commercial construction. Engineered wood finds widespread application in the construction of flooring, walls, doors, and other applications. As the construction industry expands, it leads to higher demand for all construction materials including engineered wood. The growth in the construction of both residential and non-residential buildings like malls, offices, warehouses, etc. significantly drives the market for engineered wood.
Increasing Home Renovation and Remodeling Boosts Engineered Wood Sales
Along with new construction, the home renovation and remodeling sector has also been growing steadily. As incomes rise, consumers are spending more on upgrading and modernizing their homes. Engineered wood allows for easy do-it-yourself installation and brings aesthetic and functional benefits over traditional wood materials. The advantages of engineered wood like durability, stability and low maintenance have made it a popular choice for renovations. The proliferation of home remodeling and renovation projects indirectly stimulates the demand for engineered wood flooring, decking, sidings, and other products.
Volatility in Raw Material Prices Can Deter Market Growth
One of the key restraints in the engineered wood market is volatility in raw material prices. Engineered wood depends on various types of raw wood like hardwood, softwood, and bamboo for manufacture. International prices of these raw materials fluctuate based on supply-demand forces and other macroeconomic factors. Sudden price rises in raw woods can squeeze profit margins for engineered wood producers. It may also lead to increase in final product prices which can negatively impact sales volumes. Unpredictable raw material costs pose a challenge for parties across the engineered wood supply chain to maintain stable and competitive prices.
Stringent Regulations Regarding Emissions Can Increase Production Costs
Engineered wood production involves mechanical and chemical processes that release volatile organic compounds into the air. Many countries and regions have stringent emission control regulations for industries due to growing environmental concerns. Compliance with such regulations requires engineered wood companies to install pollution control equipment in factories. This leads to higher capital and operating expenditures. Additional costs from emission control compliance can reduce the profitability of engineered wood producers. Tighter emission norms in major markets like North America and Europe may potentially hamper the market growth.
Growing Popularity of Green Building Concept Boosts Opportunities
The green building movement is gaining immense traction globally with its focus on environmental sustainability. Engineered wood products are increasingly preferred in green construction due to their lower carbon footprint compared to traditional wood and non-wood materials. Being a renewable resource with high strength-to-weight ratio, engineered wood meets the goals of green building rating systems. The rapid adoption of sustainable building practices opens up substantial opportunities to expand engineered wood applications in the eco-friendly building segment.
Rise of E-Commerce Enables New Distribution Channels
The past decade has witnessed an exponential growth of e-commerce across the world. Engineered wood manufacturers are leveraging the digital platform to sell their products directly to consumers and contractors. Online sales channels help optimized inventory, reduce costs and enhance customer reach. The availability of engineered wood options on e-commerce sites expands the potential buyer base. Capitalizing on the e-commerce boom, companies are promoting engineered wood products through various online marketing campaigns. The emergence of virtual marketplaces creates new avenues for engineered wood players to boost sales and customer experience.
Link - https://www.coherentmarketinsights.com/market-insight/engineered-wood-market-5319
Key Development
- In April 2024, SPAN FLOORS, a prominent brand of wooden flooring and facades in India for luxury homes, announced the launch of Coswick's Quick-ship Collection. This exciting new offering provides high-end homeowners an unprecedented variety of world-class engineered wooden flooring options that are either available in stock or can be delivered within 45 days from the date of order placement.
- In 2022, Boise Cascade’s Building Materials Distribution (BMD) division announced the expansion of its distribution capacity in two markets. This strategic move aims to enhance the company's ability to serve its customers more efficiently and effectively, ensuring timely delivery of building materials.
- In August 2020, Binderholz GmbH, a leading Austrian timber processing company, acquired all the assets of Klausner Lumber One LLC, a Florida-based lumber company, in an auction for USD 61.0 million. This strategic acquisition allows Binderholz to expand its timber processing capabilities in the United States.
- In January 2021, Boise Cascade, a leading manufacturer of wood products and building materials, inaugurated its second door shop in Texas, United States. This new facility, located strategically in the state, has the capacity to serve approximately 900 customers. The expansion aligns with Boise Cascade's strategy to grow its business with the support of its supplier partners.
Key Players
Binderholz GmbH, Boise Cascade, Georgia-Pacific , HASSLACHER Holding GmbH, Havwoods India Pvt Ltd, Huber Engineered Woods LLC, KLH Massivholz Wiesenau GmbH, Kronoplus Limited, Louisiana-Pacific Corporation, Mayr-Melnhof Holz Holding AG, Norbord Inc, Nordic Structures, Woodtech Corporation, Resolute Forest Products, Roseburg, Stora Enso, West Fraser, and Weyerhaeuser Company
