Residential spending in North America on decking and railing will rise 10% next year to total $3.1 billion, in part because of a revival in the price and market share for wood decking, Principia Partners predicts.

About 2.5 million decks will be built on residential structures this year, 90% of them on existing homes, said Principia's report, issued Monday. That number will increase next year by roughly 6%.

While the trend is going up now, the recession has made life tough for manufacturers, retailers, and installers lately. Principia estimates the value of the residential decking and railing market fell from $4.6 billion in 2006 to $2.8 billion in 2009, a 40% decline. "Job losses, tight credit, devalued homes, the inability to tap into home equity to finance home improvement projects, and record lows in consumer confidence have combined to push decking and railing demand back to levels that have not been seen since the early 2000s," the report said.

Meanwhile, wood prices have fallen while petroleum-based synthetic decking has had to cotend with higher raw material prices. Those price changes, plus a recession-induced trend toward thrift, has helped wood regain popularity against composites, cellular vinyl, and metal decks. Steve Van Kouteren, a principal at Exton, Pa.-based Principia and a leader of the company's decking and railing research work, told ProSales that wood's market share has moved up several points since 2007 to reach 73%. Composites and cellular vinyl products comprise roughly 26% of the market, while metal has the other 1%, he said.

Within the composites/vinyl category, demand for cellular vinyl decking has been growing at a double-digit rate while demand for wood-plastic composites has decreased, Principia said. Of the $725 million being spent this year on composites and cellular vinyl, the latter is getting about $95 million of those sales, up from just $5 million in 2004.

"The market has two primary forces at work," Principia said. "On one end of the decking market, consumers are fighting money and budget issues and are scaling back deck projects, as well as using less expensive materials. Conversely, there is a high end of the market that is less price-sensitive. This segment is using new synthetic materials, and is driving the increase in demand for cellular vinyl." Consumers who choose non-wood products also are increasingly choosing ultra-low maintenance decks--another factor in cellular vinyl's popularity, Principia said.

Next year, an increase in housing starts and modest growth in repair and remodel activity will increase the demand for decking and railing, Principia said. "About 6% of the growth will result from volume growth and another 4% from product mix and a slight recovery in wood prices," it said. "Pent-up demand from consumers will help support decking and railing growth in 2010. Total decking and railing demand is expected to increase from $2.8 billion in 2009 to $3.1 billion in 2010."