Atlanta HardiPlank Siding and Exterior Trim, Soffit and Fascia Products: Bright Stars in a Recent Soft Market According to Principia Study
John Pruett, a Principal at Principia explains “although vinyl siding has reached a mature stage in its product cycle and our Firm projects growth to be -2% per year, the silver lining may be in vinyl shingles. Producers including Alcoa and CertainTeed are attempting to protect market share by creating vinyl shingles. Other exciting advances in the siding industry include polymer stone products typically fabricated from polyurethane or polypropylene in the case of Crane’s Bella line. In addition, replica cedar siding is also expected to be a winning product over the next five years. Broadly, this segment can be fiber cement shingles, molded PP, cellular PVC, and real cedar in panelized form.”
Exterior trim also continues to be a fast-growing market segment, especially with cellular PVC by companies like AZEK and Royal Mouldings. Fiber cement trim has grown with greater product introductions by James Hardie.
Siding preferences are highly regional in nature and mirror domestic architectural history. Vinyl is king in the Northeast just as non-combustible fiber cement dominates in the West. While vinyl is popular in the Midwest, brick, wood and other materials also make a strong showing. The Southeast is more eclectic. It is the epicenter of brick usage, but vinyl and fiber cement have a presence there too. The Southwest, favors stucco and adobe style architecture, with fiber cement becoming the mainstream cladding material.
Performance of all siding and exterior trim products and materials continues to improve. While the industry is not known for rapid advances in technology, continued improvement in factory-applied coatings, cementitious plaster stucco, and the use of acrylic resins in vinyl siding has led to products with greater resistance to fading, improved impact resistance, and longer lifetimes. The industry’s “holy grail” is a composite product that will combine the best performance characteristics of multiple synthetic materials, but with the workability and appearance of wood. Also highly desired is the look of brick and stone without the masonry skills or the costs associated with natural brick and stone masonry.
New residential construction represents approximately two-thirds of the demand for siding and trim products in North America. The repair and remodeling segment accounts for 37% of the siding market valued at $3.1 billion. Growth in siding for repair and remodeling is expected to outpace that for new construction over the next two years as the overhand of excess inventories of new homes is reduced.
The leaders in vinyl siding are CertainTeed, Alcoa Home Exteriors, and Owens Corning. However, this segment could change dramatically with the Alcoa and Ply Gem merger becoming effective in late 2006 and creating a new market share leader. Furthermore, Owens Corning announced in mid-February that it will look at strategic alternatives for its siding business. The company’s siding solutions business includes the company's vinyl siding manufacturing operations and Norandex/Reynolds distribution business. Owens Corning expects to complete the process by midyear.
Principia’s study has analyzed the drivers and trends of the residential siding and exterior trim market by region, distribution channel, market segment and material type, and provides forecasts for the next five years. Key issues that have been addressed include:
Changing trends in product substitution
Up-to-date assessment of the siding and exterior trim market