Back to Basics The resurgence of real wood-decking

tTl"u TRoUBLED EcoNoMY has driven I down the North American residential decking and railing market 4OVo,from $4.6 billion in 2006 to $2.8 billion in 2009, according to a new Principia Partners study.

The most noticeable trend during the three-year slide has been wood decking regaining lost market share from synthetics, apparently driven by demand elasticity due to lumber deflation, while petroleum-based synthetics have experienced significant raw material price escalation.

"Lumber prices are at all-time lows, and the gap between the cost of pressure treated lumber and composites is the highest it's ever been," notes Dick Gauthier, Universal Forest Products.

Wood decking and railing have steadily lost market share to synthetics since the introduction of composites more than 20 years ago, based on performance and maintenance benefits. Wood's market share hit a low in 2007, maintained its position in 2008, and reversed in 2009.

Wood decking, says Allweather Wood's Rick Danielson, "is competi- tively priced, and consumers are more price conscious. Typical retail for treated wood decking is $ l 00 to $ I .10 per lineal foot. Non-wood products are about $1.65 and up. Also, the higher the price, the greater the customers' expectations."

McFarland Cascade's Greg Phillips agrees that the "resurgence of treated wood decking sales as a percentage of decking surface sales is directly con: nected to the low-priced lumber market. In this tough economy, PeoPle still want to enjoy outdoor living, so they are turning to more economical solutions. As the economy improves. we suspect maintenance issues will likely overcome the initial cost advantage of pressure treated lumber, though wood will always be a big part ofdeck surface sales."

Product failures by composites haven't helped. "We have noticed a slight change towards wood decking or forms of wood decking," saYs Northern California dealer Rick Zaslove. "With the class action claims and composites not Performing as expected, Golden State Lumber and Sierra Point Lumber have noticed some of our customers looking for real wood decking that perform well to many weather conditions. Hardwood decking like ip6 and Clear and Deck Heart redwood decking products seem to fit this need best. [Composite manufacturers] have made some major changes in their product lines, and we will continue to support their efforts."

In addition, "the new 'heat treated' wood decking products are making some headway," says dealer Gene McKinney, Tindells', Knoxville, Tn.

"They are real wood, stronger, stilfer, less expensive, and install like any other wood deck. We stock and sell this product and are having some success."

Next generation preservatives are also giving a boost to good, old pressure treated wood decking. "The quality demands of the big boxes regarding pressure treated lumber are also the highest they've ever been." offers UFPI's Gauthier. "So it's harder to disparage pressure treated since the quality is pretty good today."

Dennis McWhirter, Exterior Wood, Washougal, Wa.. agrees wood decking has never been better. "With the advancement and durability of today's stains and sealers. consumers are moving back to the tried and true wood products: cedar and treated decking," McWhirter says. "We are seeing renewed interest in the use of tropical hardwood for decking, as well. These products are being used in both commercial and residential applications, where the consumer is looking for something that makes a statement. Although there is slightly more maintenance with this product, the wow factor is well worth it."

Although the synthetic decking cat egory as a whole has lost share to wood, demand for cellular vinyl decking has been growing at a double-digit rate, due to the growing popularity of ultra-low maintenance decks among homeowners.

''The market has two primary forces at work," says Principia's Steve Van Kouteren. "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."

Cellular vinyl demand growth is at the expense of polyolefin-based woodplastic composite (WPC) decking. "Composite decking is losing market share to wood on the low end and losing market share to cellular PVC on the high end," Van Kouteren says. "Total value for WPCs and cellular vinyl is estimated at about $725 million, or 26Vo of the decking and railing market in 2009. Total North American demand for cellular vinyl in residential decking grew from about $5 million in 2004 to over $95 million in 2009."

About 2.5 million decks were built Building- cln residential structures in 2009. and over 90Vo are on existing homes as part of a remodeling project or replacement (R&R) of an existing deck. Job losses, tight credit, devalued homes, the inability to tap into home equity to finance home improvement projects. and record lows in consumer confidence combined to push decking and railing demand back to levels unseen since the early 2000s.

The future is brighter for decking and railing, as homeowner desire for quality leisure time and outdoor living in the backyard or front porch of the home is part of the fabric of American living. An increase in housing starts and modest growth in R&R activity should increase the demand for decking and railing, on a value basis, about 10Vc in 2010 from its bottom in 2009. About 6Vo of the growth will result from volume growth and another 47o from product mix and a slight recovery in wood prices. 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.

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