Total North American demand for decking and railing shows modest growth, but the “ultralow maintenance” category with coextruded capstock or cellular PVC is driving sales higher, according to Principia Partners.
Demand for all types of decking and railing was up slightly in 2010 over 2009, and the sector is expected to increase modestly in 2011 in North America, to $3.4 billion, said a report from the Exton, Pa.-based consulting company.
The total value of decking and railing will grow by 5 percent in 2011, Principia said. Growth is being driven mainly by price increases for most all-plastic decking and railing, plus a continued shift from lower-priced, uncapped wood-plastic composites to premium capped wood composites and cellular PVC, Principia said.
Decking and railing sales are forecast to grow by about 8 percent per year through 2013, Principia said. That prediction is based on solid growth in home construction and remodeling in 2012 and 2013. However, that outlook is clouded by weak home prices and the inventory of foreclosed homes, as well as a possible stalling of economic recovery.
Steve Van Kouteren, a principal with Principia, said ultralow maintenance products and improved aesthetics drove demand for capped decking by nearly sixfold in 2010 over 2009. Darker cellular PVC decking with variegated, wood-grain colors helped the cellular business grow by nearly 40 percent in 2010, he said.
“We expect these trends to continue through 2011,” he said.
The report said the ultralow maintenance category now accounts for nearly 45 percent of total synthetic decking, up from just 15 percent in 2008. The industry is becoming more concentrated, as the top four manufacturers now account for more than 75 percent of the market.
Principia said wood decking and railing is still the largest segment, and wood managed to reverse its market share loss to plastic alternatives in 2009. But that could change.
“We believe that the new ultralow maintenance composite and cellular vinyl decking products, now being offered at various price points, will reignite market share growth for synthetic decking and railing over wood. However, the capped products need to perform as advertised,” Van Kouteren said.
Principia will hold WPC 2011, its annual decking conference, Oct. 3-4 in Charlotte, N.C.