Growth of plastics is scattered throughout the housing market

There's no place like home to illustrate how plastic products have pushed the envelope when it comes to changes in the building industry over the last quarter century.

Plastics have grown to dominate the residential markets for plumbing fixtures, siding and windows; meet new demands for thermal performance and moisture resistance; and reduce maintenance needs from backyard decks to polymer roof shingles.

Sure some plastics like vinyl floors and laminated countertops have come and gone out of vogue in the past 25 years. But no doubt the increased use of synthetic materials have had a role in the affordability, durability, energy efficiency and curb appeal of U.S. housing from the ground up.

In the built world, plastics continue to displace copper, wood, aluminum and other materials, including older polymers, sometimes as the cheaper alternative and sometimes as the premium product.

 One of plastic's biggest contributions to construction since 1989 has been its role in putting a proper seal on the building envelope, according to Edward Hudson, director of the market research division for Home Innovation Research Labs, a subsidiary of the National Association of Home Builders.

From flash tape around doors and windows to polyolefin wraps around entire exterior shells, material science experts have improved building performance with plastic.

“A big driver has been energy costs and ratcheting up of energy codes,” Hudson said in a telephone interview. “That means the thermal envelope has to be much more efficient and air tight, and those two things mean we're adding more insulation and we're tightening the envelope to reduce air infiltration into the home.”

House wraps provide a weather-resistant barrier under cladding that blocks air leaks and stops moisture. Any water that does get through the cladding drains off instead of being absorbed by the sheathing, where it can cause rot, mold or mildew.

“Ten years ago there was a major industry-wide shakeup on mold growth in homes,” Hudson said, citing another benefit house wraps bring to a wall assembly.

Finding ways to reduce labor and operating costs for contractors, while making homes more comfortable for end users, also factored into innovation, according to Tim Lacey, business director for Dow Building Solutions-Americas. He refers to a new product, Froth-Pak, as a game-changer for spray foam for installation.

However, providing a sustainable energy supply, addressing climate change and reducing carbon footprints are among the most urgent issues facing the building industry, Lacey said in an email, pointing to statistics that show buildings are the largest energy user. In 2013, 40 percent of total U.S. energy consumption was consumed in residential and commercial buildings, according to the U.S. Energy Information Administration.

“As a result, greater emphasis is being placed on transforming the building sector,” Lacey said. “This, coupled with the urbanization megatrend, is driving the need for greater awareness, understanding and a growing interest in the impact plastics can have in providing sustainable solutions that will help to offset greenhouse gas emissions and a create a more sustainably built environment for future generations.”

Changing materially

Looking back at the built world of 1989, copper was the material of choice for pipes that carry hot and cold water through a house. However, the cheaper, easier-to-install thermoplastic chlorinated PVC (CPVC) began displacing it. Now it is losing market share to another plastic — cross-linked polyethylene (PEX).

“PEX zoomed passed CPVC as a water supply pipe,” Hudson said. “CPVC is doing fairly well. It's got a quarter of the market, PEX is looking at 65 percent and the remaining is copper.”

Hudson has been with Home Innovation Labs for 20 years, monitoring the building industry the entire time. In some applications, like windows and siding, he said plastics became the dominant material because of their reputations as durable, low-maintenance products.

“Vinyl windows are by far the most popular windows now,” Hudson said. “Twenty-five years ago it was wood and aluminum but vinyl is found very commonly on starter homes up through luxury homes. It's not that people believe vinyl windows are inherently better than wood windows but at this point there are many builders and homeowners in many parts of the country who prefer vinyl because they perceive low maintenance both on the inside and the outside.”

In 2013, vinyl windows made up almost 69 percent of the residential market followed by wood windows at 20 percent, according to the Window and Entry Door 2014 U.S. Market Study released in August by the Window and Door Manufacturers Association. This market is projected to increase by 9.1 percent this year and 8.3 percent in 2015.

While use of vinyl windows grows, Hudson said the use of vinyl siding is falling off after peaking in popularity in the late 1990s for home remodeling and in about 2000 for new construction. Vinyl siding continues to be top cladding choice but fiber cement is taking share followed by stucco and brick. The market share for vinyl siding slipped from 39 percent in 2003 to 27 percent in 2013, according to the Cleveland-based market research firm Freedonia Group Inc.

To keep their lead, vinyl siding manufacturers are expanding color options, coming out with more insulated panels, promoting price advantages, and fighting what they say is misinformation in fiber cement marketing campaigns. Cellular PVC siding, which mimics the look of wood, also is beginning to compete with fiber cement as a slightly higher-priced alternative.

“A powerful trend that has weighed against plastics has been the desire for a natural look and feel,” Hudson said. “That's one of the things that weighs against vinyl siding and vinyl flooring.”

However, that's not the case across the board with polymer building materials, he added.

On deck

Plastics have made big strides into other wood strongholds like decks, fences and rails. Decks, in particular, have gone from humble wooden platforms tacked onto the back of a house for a barbecue grill to sprawling, multi-level extensions of living space often made of composite materials.

“Plastic composite decking has grown from very little — virtually nothing — 25 years ago to my estimate being a quarter to a third of the market,” Hudson said. “The reason: durability. Although wood may not rot if it's treated, a few things have driven plastic's popularity. No. 1, wood does deteriorate due to moisture cycling —- wet, dry, wet, dry. That causes it to shrink and expand and shrink and expand. A wood material exposed to both water and sun also has a tendency to fatigue and become less attractive over its life.”

Then, there's the decreased availability of traditional rot-resistant species of wood like redwood and cedar. Hudson said that's prompting a change to alternative materials and “plastic is a primary one.”

Plastic lumber decks are doing even better than Hudson's estimate, according to a comment made by Ron Kaplan, chairman, CEO and president of Trex, during a conference call about third quarter earnings on Oct. 27. Trex makes composite decks from recycled polyethylene film.

Kaplan said the overall deck market is increasing by “low to mid-single digit numbers” every year with gains coming at the expense of wood. To quantify the change taking place for investment analysts, he said, “Don't forget in 1999 composites represented only 3 percent of the decking market. Right now it's probably approaching 35 percent.”

Decks are a good example of a building product category where plastics replicate the appearance of wood and add other values that can command a higher price tag.

“If it's a deck, it's the high-cost alternative to wood,” Hudson said. “If it's floors and siding, it tends to be the low-cost alternative.”

Economic factors

The high-end material market has been rebounding for a few years and some items like granite countertops — a category where plastics did poorly against natural products — are almost back to where they were at their 2008 peak, Hudson said.

The U.S. homebuilding and remodeling industry, which is viewed as a primary contributor to the national economy, reached unprecedented levels of production in the early 2000s. At its peak in 2006, residential construction firms employed more than 1 million people and the specialty trades another 2.5 million. Home values peaked about the same time.

The run-up in housing prices was fueled in part by low interest rates and lax lending. Then the bubble started to burst. Home sales slowed in 2006 and the boom was over in about 2007. Consumers who had used the equity in their over-valued homes for spending, ended up under water.

During the resulting financial crisis of 2007-08, banks needed bailouts, homeowners faced foreclosure, the stock market dropped, consumer wealth plunged and the construction industry was on its way to losing 75 percent of its housing starts and 40 percent of its workforce.

“The housing bubble and the breaking of the bubble had a certain impact on the industry and then the recession had another and it was very different,” Hudson said.

The boom-and-bust period had a huge effect on driving the high-end building material market, according to Hudson.

“When the bubble burst, a lot of builders were holding onto land and houses they had constructed,” he explained. “They needed to find a way to get rid of them and the market got really competitive so they had to continue to add more high-end products and features in order to sell the homes,” Hudson said. “This continued for a couple years until the recession.

“When the recession hit, the home buyers and home builders got more realistic and there was a significant decline in the share of materials considered high end.”

Hudson said the housing market tanked in 2008-09 and then bounced along the bottom until about 2012 when it started to trend up again.

“2013 and 2014 have been better years,” he said.

A couple years into a rebound, some premium building materials orders are up again and some aren't.

“Wood windows took a big dive with the recession and although they're back up a little that was an opportunity where vinyl windows zoomed ahead,” Hudson said. “Apparently builders remained satisfied and didn't switch back to wood.”

Getting greener

Another preference among home builders is green housing, which can be comfortably heated and cooled with minimal energy usage; reduces water consumption; takes advantage of renewable resources; and limits carbon dioxide emissions, among other things.

McGraw Hill Construction estimates that the green market was 2 percent of residential starts in 2005 but increased to 6 to 10 percent in 2008 and was at least 12 percent in 2013.

“The green building movement has been driven by home builders who are leading edge and idealistic,” Hudson said. “They want to improve their industry and human habitation. They're proud to tell you they build green homes. Not all of them are certified to any independent standard, and interestingly, only a small percent of home buyers understand they're buying a green home. It doesn't strike them”

Most consumers buy homes because the dwellings have the space they need and the features they want in the neighborhood they desire, Hudson added, but green builders are starting to pull a lot of people along.

“It's the thing they do all day and they want to do it better,” he said. “They love the home and it's more than a way to earn an income. It's something to continue to improve and perfect.”