Global Engineered Wood Market Overview, 2024-29

Market Dynamic

Market Drivers • Technological Advancements in Production Processes: Computer-controlled precision cutting, automated gluing systems, and innovative lamination techniques contribute to the production of high-quality engineered wood products. These technological improvements enhance efficiency, reduce production times, and allow for the creation of engineered wood with superior strength and durability. As the industry embraces and invests in cutting-edge technologies, it positions itself to meet the evolving demands of the market. • Consumer Preferences for Customization and Design Flexibility: Consumer preferences are shifting towards more personalized and unique designs in construction and interior spaces. Engineered wood offers a high degree of customization in terms of size, shape, and finish, allowing architects, designers, and homeowners to create distinctive and aesthetically pleasing structures and furnishings. The ability to tailor engineered wood products to specific design requirements is a major driver, as it caters to the growing demand for individualized and architecturally innovative solutions. Market Challenges • Competition from Alternative Materials: The engineered wood industry faces stiff competition from alternative building materials, including steel, concrete, and composite materials. Convincing stakeholders in the construction and design sectors of the benefits of engineered wood over these alternatives is a continuous challenge. The industry must communicate the economic, environmental, and performance advantages of engineered wood to maintain and expand its market share in the face of diverse material choices. • Skilled Labor Shortage: As the demand for engineered wood products increases, there is a growing need for skilled labor in manufacturing, installation, and design. However, the industry is grappling with a shortage of skilled workers. Training programs and educational initiatives are essential to address this challenge and ensure a workforce equipped with the necessary expertise to produce and work with engineered wood effectively. Overcoming the skilled labor shortage is crucial for sustained growth and competitiveness. Market Trends • Innovations in Adhesive Technologies: Adhesives play a critical role in the production of engineered wood, binding the layers of veneers or fibers together. Ongoing research and development in adhesive technologies contribute to the creation of engineered wood products with enhanced performance characteristics. Innovations in adhesives lead to improved durability, moisture resistance, and overall product quality, addressing historical concerns and expanding the applications of engineered wood in various environments. • Global Embrace of Green Building Standards: The global emphasis on sustainable and green building practices is a significant trend influencing the engineered wood industry. Green building standards, such as LEED (Leadership in Energy and Environmental Design), promote the use of environmentally friendly materials and construction methods. Engineered wood, with its sustainable sourcing and manufacturing processes, aligns well with these standards, positioning itself as a preferred choice in projects aiming for green building certification. The industry's alignment with these standards enhances its market appeal and contributes to the broader sustainability goals of the construction sector. Covid-19 Impacts The engineered wood industry relies on a complex global supply chain for raw materials, manufacturing equipment, and transportation. The pandemic disrupted supply chains as lockdowns, travel restrictions, and workforce shortages affected the production and transportation of goods. Delays in the availability of raw materials and components created challenges for manufacturers, impacting their ability to meet demand and fulfill orders promptly. The construction industry, a major consumer of engineered wood products, experienced fluctuations in demand during the pandemic. Construction projects were delayed or halted in many regions due to lockdowns, social distancing measures, and economic uncertainties. This directly affected the demand for engineered wood products, leading to a slowdown in some segments of the industry. The residential construction sector, which is a significant market for engineered wood products, faced disruptions as a result of the pandemic. Lockdowns and economic uncertainties influenced consumer behavior, leading to a decrease in new housing starts and renovations. The slowdown in residential construction had a direct impact on the demand for engineered wood products used in home building and improvement projects. The pandemic introduced challenges related to workforce availability and safety. Many manufacturing facilities experienced temporary closures or reduced capacity due to social distancing measures and lockdowns. This affected the production capabilities of the engineered wood industry, leading to delays and increased operational costs associated with implementing health and safety measures for workers. The pandemic brought about increased costs for manufacturers in the engineered wood industry. Supply chain disruptions, higher logistics costs, and safety measures to protect workers contributed to rising operational expenses. These increased costs were often passed on to consumers, affecting the overall competitiveness of engineered wood products compared to alternative materials. Changes in consumer behavior during the pandemic also impacted the engineered wood industry. Remote work trends and the increased focus on home improvement projects led to shifts in the types of products in demand. For instance, there was an increased interest in engineered wood flooring and furniture as people spent more time at home, but other segments, such as commercial construction, experienced a decline.

Key Development

• In April 2023, WoodTech Innovations unveiled a breakthrough in engineered wood technology with the introduction of a lightweight yet strong and durable engineered wood beam. The innovative design combines different wood species and engineered materials to create a beam that offers superior load-bearing capacity and structural performance. This advancement in engineered wood beams opens up possibilities for cost-effective and sustainable construction solutions in the residential and commercial sectors. • In May 2023, GreenWood Corp launched a range of engineered wood products with improved moisture resistance and dimensional stability. The company's advanced treatment process ensures that the engineered wood retains its structural integrity even in high humidity and wet environments, making it suitable for outdoor applications such as decking and siding. This development expands the application scope of engineered wood and provides architects and builders with more versatile options. • In June 2023, TimberTech Solutions introduced a new line of engineered wood flooring with enhanced scratch and wear resistance. The innovative surface treatment technology used in the flooring provides superior durability and longevity, making it ideal for high-traffic areas in residential and commercial settings. The development of highly durable engineered wood flooring offers an attractive alternative to traditional hardwood flooring, combining the aesthetic appeal of wood with enhanced performance characteristics. • In Oct 2023, Boise Cascade announced that it has completed the previously announced acquisition of Brockway-Smith Company (BROSCO®), a leading wholesale distributor specializing in doors and millwork. • In Sep 2023, West Fraser Timber Co. Ltd. announced that it has entered into an agreement to acquire Spray Lake Sawmills located in Cochrane, Alberta. This acquisition enables West Fraser to grow its footprint in Southern Alberta and expand its Canadian treated wood business, while providing access to a high-quality timber supply.