Challenges ahead for engineered buitding components

qOffWOOD lumber is not the only L)market marked by grumbling about overcapacity and intensifying competition between the U.S. and Canada. A similar situation exists for structural building componentsintensified since such products as engineered wood, trusses and prefabricated panels are not subject to countervailing and anti-dumping tariffs.

Although U.S. trade actions seem to have had little effect on structural composite lumber and glulams, I-joist flange stock is covered, encouraging Canadian manufacturers to increase manufacturing capacity of finished Ijoists, according to a new study by the U.S. International Trade Commission. The Senate-requested ITC study of "competitive conditions in the U.S. structural building components industry" from 1997 to 2002 found that U.S.-based producers dominate the wood component industry, although production is on the rise on both sides of the northern border.

During the study period, the ratio of U.S. building component imports to usage increased from 3.4Vo to 5.5Vo. Concunently, U.S. exports of some of the items declined.

Truss manufacturers compete most vigorously in states adjacent to the Canadian border, and operate at a disadvantage in a two-tier pricing market. But rapid growth in LVL and I-joist capacity in both countries during the last five years has led to overcapacity in the market, which could inhibit future expansion.

Transportation costs favor U.S. producers, since they are closer to the hotbeds of new home construction: Florida, Califomia and Texas.

Canadian production is a fraction of the U.S.'s.

Total consumption of building components in the U.S. was fueled by an ll%o increase in average house size, and 4.2Vo annual growth of residential repair and remodeling and nonresidential commercial construction. Wood held an 86Vo sharc of the U.S. residential market for structural building materials.

Over the last five years, U.S. production of trusses increased, on average, SVo a year; trusses and prefabricated panels rose 9Vo, and EWP, 3.87o. ln 2002,1,690 U.S. firms produced

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