North American demand for decking and railing will increase by an average 8% per year through 2013, Principia Partners predicts. The research group expects this market to grow by 5% in 2011 and reach a value of $3.4 billion and then accelerate in 2012 and 2013 to be worth $4 billion.
Principia attributed the gains largely to price increases for cellular PVC decking and railings, as well as a shift in demand from lower-priced, uncapped wood-plastic composites (WPCs) to premium capped WPCs and cellular vinyl decking.
Wood decking and railing products currently make up 60% of the market at $1.9 billion, while plastic-based and synthetic products make up 34% of the market and metal deck and railing products comprise the other 6%.
"Wood decking and railing, including pressure-treated, cedar, redwood, other softwoods, and imported hardwoods still command the major share of the decking and railing market, on a volume basis, and have maintained their market share position against plastic-based decking and railing products since 2005," says Steve Van Kouteren, principal at Principia Partners.
Principia said the ultra-low maintenance decking category, which includes capped WPC decking, now accounts for almost 45% of all synthetic decking demand, an increase of 30 percentage points from 2008. Growth in demand, as well as expansion of channel partnerships and a customer base that favors the larger, established companies, were cited as the reasons for the industry expansion. The top four companies in the industry account for more than 75% of the market, while Principia estimates the top 10 suppliers now account for over 95% of the market, up from 90% in 2008.