The Pandemic Deepens the Slowdown of the American Wood Window and Door Market

IndexBox has just published a new report: 'U.S. Wood window and door Market. Analysis And Forecast to 2025'. Here is a summary of the report's key findings.

After six years of growth, the U.S. wood window and door market decreased by -2.1% to $12.2B in 2019. The market value increased at an average annual rate of +3.5% over the period from 2013 to 2019; the trend pattern remained consistent throughout the analyzed period. The growth pace was the most rapid in 2015 with an increase of 8.3% year-to-year. Wood window and door consumption peaked at $12.5B in 2018 and then dropped slightly in the following year.

The growth of the construction sector was the main driver behind the growth of the wood window and door market. Prior to 2020, construction in the U.S. grew robustly, driven by the rising economy, disposable incomes and the availability of loans. In early 2020, the global economy entered a period of the crisis caused by the outbreak of the COVID-19 pandemic. In order to battle the spread of the virus, most countries in the world implemented quarantine measures that put on halt production and transport activity.

The combination of those factors disrupted economic growth heavily throughout the world. According to World Bank forecasts, despite the gradual relaxing of restrictive measures and unprecedented government support in countries that faced the pandemic in early 2020, the annual decline of global GDP could amount to -5.2%, which is the deepest global recession being seen over the past eight decades.

The U.S. is also facing a drastic short-term recession, with the expected contraction of GDP of approx. -6.1% in 2020, being hit by the pandemic harder than expected, with unemployment increasing due to the shutdown and social isolation.

The construction sector has proven extremely vulnerable to the pandemic. Thus, the above economic prerequisites will have the most negative impact on the production of building materials, and, therefore, on the consumption of wooden windows and doors. Thus, due to quarantine measures, construction projects were paused, and the drop in incomes of the population makes mortgage loans less affordable.

Moreover, the reduced capital investment may lead to the postponement of plans for the building new and the renewal of the existing dwellings, infrastructural and industrial facilities. In addition, the disruption of established international supply chains between wooden windows and doors producers and consumers due to asynchronous quarantine measures and restricted transport activity.

In the medium term, should the pandemic outbreak end in the second half of 2020, the economy is to start recovering in 2021 and then return to the market trend of the gradual growth, driven by the fundamentals existed before 2020 and boosted by support measures imposed by the government. Accordingly, the American wood window and door market is to drop by approx. 6% in 2020 and then to start growing gradually. However, those projections are very vulnerable to the possible second wave of the COVID epidemic.

Production of Wood Window and Door in the U.S.

In value terms, wood window and door production fell slightly to $11.6B in 2019. The total output value increased at an average annual rate of +3.2% from 2013 to 2019; the trend pattern remained consistent, with somewhat noticeable fluctuations being observed throughout the analyzed period. Over the period under review, production reached the maximum level at $11.9B in 2018, and then shrank slightly in the following year.

Imports into the U.S.

In 2019, overseas purchases of wood window and door decreased by -10.2% to 13M units for the first time since 2015, thus ending a three-year rising trend. In general, total imports indicated a remarkable increase from 2013 to 2019: its volume increased at an average annual rate of +5.1% over the last six-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. In value terms, wood window and door imports contracted modestly to $765M (IndexBox estimates) in 2019.

Canada (3M units), Mexico (2.8M units) and Brazil (2.6M units) were the main suppliers of wood window and door imports to the U.S., together comprising 66% of total imports. These countries were followed by China, Chile, Indonesia and Vietnam, which together accounted for a further 27%.

From 2013 to 2019, the most notable rate of growth in terms of purchases, amongst the main suppliers, was attained by Vietnam (+62.5% per year), while imports for the other leaders experienced more modest paces of growth.

In value terms, Canada ($307M) constituted the largest supplier of wood window and door to the U.S., comprising 40% of total imports. The second position in the ranking was occupied by Brazil ($115M), with a 15% share of total imports. It was followed by China, with a 13% share.

Import Prices by Country

In 2019, the average wood window and door import price amounted to $60 per unit, picking up by 9.7% against the previous year. In general, the import price showed a relatively flat trend pattern. The import price peaked at $67 per unit in 2016; however, from 2017 to 2019, import prices remained at a lower figure.

There were significant differences in the average prices amongst the major supplying countries. In 2019, the country with the highest price was Canada ($101 per unit), while the price for Vietnam ($23 per unit) was amongst the lowest.

From 2013 to 2019, the most notable rate of growth in terms of prices was attained by China, while the prices for the other major suppliers experienced more modest paces of growth.

Companies Mentioned in the Report

Andersen Corporation, Marvin Lumber and Cedar Company, Pella Corporation, Masonite International Corporation, Ply Gem Industries, Amarr Company, Weather Shield Mfg., Conestoga Wood Specialties Corporation, Odl Incorporated, Judson Enterprises, Decore-Ative Specialties, Bright Wood Corporation, Woodharbor Molding & Millworks, Marshfield Doorsystems, Truth Hardware Corporation, Marvins Windows and Doors of Tennessee, Steves & Sons, Eggers Industries, T. M. Cobb Company, Cascade Ohio, Mohawk Flush Doors, Mw Manufacturers, Marvin Windows of Tennessee, Masonite Corporation, Roberts Trading Corporation, US Test Company 201, Hwd Acquisition, Clopay Building Products Company, Masonite Holdings, The Cook & Boardman Group

Source: IndexBox Market Intelligence Platform