Engineered wood demand bodes well for housing

Industry group predicts 15 percent rise in US housing starts this year

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Jun. 8, 2012

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The peak of North American engineered wood production was 43.1 billion square feet in 2005. The abyss came four years later, in 2009, when production dropped off the cliff to 24.3 billion square feet, which even Adair claims "was a huge decline."

This year, APA is predicting 27.8 billion square feet of production, followed by 29.6 billion in 2013.

This is obviously a gradual improvement in the market for engineered wood, which perfectly mimics the slow return of new-home construction.

"Five years out we are talking about 37 billion square feet, still not reaching the apex of the housing bubble," said Adair.

However, the housing bubble could have been such an aberration, so who knows if new housing or engineered wood could reach those record numbers ever again.

I asked Adair, with the housing market down, whether the engineered wood producers were able to shift product to other markets. The answer: Not really. Glulam, I-joists and LVL have always been very dependent on new residential construction (I-joists, in particular, because they don't have mush use in repair and remodeling as, say, an average lumber product).

On the other hand, structural panels are used everywhere. In 2005, 55 percent of structural panel production went into new residential construction; today only 35 percent is dependent on the housing market.

That seemed like a healthier breakdown for the product, not so dependent on one sector of the economy.

Adair didn't quite agree, noting, "The mills still have the capacity to manufacture that larger number." But does the housing market have the ability to return to "bubble" numbers? That's the rub -- or at least the veneer.

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on

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