The Global Engineered Wood Market was 229,120. 00 thousand cubic meters in 2020 and the market is projected to register a CAGR of 4. 99% during the forecast period (2021-2026). Since governments around the world implemented lockdowns and halted domestic and foreign shipping systems to control the COVID-19 epidemic, it had a major effect on the forestry industry’s supply chain, particularly the wood processing and production market.
New York, May 03, 2021 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Engineered Wood Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" - https://www.reportlinker.com/p06067812/?utm_source=GNW
The demand for engineered wood is associated with the construction industry, which, in turn, is directly linked to GDP growth, this situation is quite instrumental in creating many challenges for the global engineered wood market. For instance, Europe, like the rest of the world, faces an extended economic crisis. Also, according to IMF predictions, the European Union contracted by 6.1% in 2020. Even though the EU economy is expected to recover and register a growth of more than 4.4% in 2021, returning to its 2019 level only in 2022. This has a severe impact on the demand, supply, and value chains. This situation is expected to persist throughout the year, negatively affecting the region’s engineered wood demand. There is still a huge uncertainty hovered around the nearby future, which can induce a negative momentum to the engineered wood market over the forecast period.
- Over the medium term, growing demand from the non-residential sector and increasing use of cross laminated timber (CLT) as construction material is likely to drive the market. The usage and manufacturing of engineered wood require less energy compared to conventional building materials like concrete and steel. As engineered woods are manmade, they are designed to meet the requirements, reducing wastage, time, and overall costs. The wood products are often used as beams and columns in construction and even support heavy loads and show greater strength. The growing construction activities in the non-residential sector are driving the market.
- Stringent environmental concerns related to formaldehyde emissions is likely to hinder the market growth.
- Asia-Pacific region to dominate the market across the globe with the largest consumption of engineered wood during the forecast period.
Key Market Trends
Growing Demand form the Residential Sector
- Engineered wood is used for a wide range of applications from furniture, walls, flooring, doors, roofs, cabinets, columns, beams, and staircases, among others.
- The application of cross-laminated wood has been increasing rapidly. For low-rise construction, the increased loadbearing capacity of CLT wall panels adds further benefit over conventional stud-framed walls. Cross-laminated timber is now an established system in the mid-rise residential sector in Europe and North America. In addition to that, there are now increasing examples of cross-laminated timber being used to construct skyscrapers for buildings over 150 m tall. The growing application of OSB in various residential applications, such as walls, flooring, and roof, is estimated to drive the market.
- All types of engineered woods are significantly used in various applications in the residential sector. Europe, with 73% of its population living in urban areas, is expected to be over 80% urban by 2050. European furniture companies are very successful and innovative, examples being the German, Italian, and Nordic furniture companies, which act as the benchmark in the field of high-class design.
- In the United States, there are a couple of residential construction projects in the pipeline, creating opportunities for furniture consumption.
- With the rapidly increasing population in Canada, due to the presence of migrants and students from across the world, Canada’s residential construction is quickly growing. In 2019, the total residential construction in August was valued at USD 6,293,456, which was USD 3,967,198 in April (2019). This depicted the huge rise in investment. Moreover, this factor is expected to drive the market studied.
- The Indian government announced an investment worth USD 31,650 billion for the construction of 100 cities under the smart cities plan. One hundred smart cities and 500 cities are likely to invite investments worth INR 2 trillion (~USD 28.18 billion) over the coming five years.
- The growing applications of engineered wood in residential applications and renovation and repairs are estimated to drive the market during the forecast period.
- However, the outbreak of coronavirus has slowed down residential construction activities due to lockdown and disruptions in the supply chain. The ongoing pandemic has negatively affected the market studied and is estimated to recover and grow during the later part of the forecast period.
Asia-Pacific Region to Dominate the Market
- Asia-Pacific region is expected to dominate the market for the engineered wood market during the forecast period due to an increase in demand for construction activities in the region.
- According to the IMF, in 2020, China’s GDP recorded a growth rate of 2.3%, indicating signs of a V-shaped recovery. According to the IMF’s forecast, the country is expected to reach a GDP growth of 8.4% in 2021.
- The construction industry grew at a strong pace in 2019, but the growth was slow compared to 2018. The construction sector has supported economic growth in the country whenever major slowdowns occurred. The country has the largest construction market in the world, encompassing 20% of all construction investments globally. China is expected to spend nearly USD 13 trillion on buildings by 2030. According to the National Bureau of Statistics of China, the construction output value in the country increased from CNY 9.6 trillion in 2010 to CNY 24.84 trillion in 2019.
- China has a very strong demand for furniture due to its high population. The huge population base and the rising disposable income of consumers are bolstering the development of the Chinese furniture industry. Customers are willing to spend more on floor coverings and furniture. The urbanization, increasing real estate development, strong growth in GDP, and economic stability in the country are some of the other major factors aiding the growth of the furniture sector. This is expected to further drive the demand for engineered wood in China.
- The Indian government initiated the project called “Housing for All by 2022”, which is expected to immensely drive the low-cost residential construction segment in the country throughout the forecast period. Furthermore, under the Pradhanmantri Awas Yojana scheme, the Indian government has taken the decision to provide interest subventions of 3% and 4% for loans of up to INR 12 lakhs and INR 9 lakhs, respectively, for the lower strata of the society, with respect to buying and building homes.
- The office sector is one of the crucial markets for engineered wood. In India, the demand for office spaces is gradually rising. Growth and improvement in the business environment have benefitted several sectors in the country, with the commercial office sector being the prime benefactor. The growth of commercial real estate has been driven largely by the service sectors, especially the IT sector.
- Japan imports over 25% of its manufactured furniture and homeware products. There is potential for the Japanese furniture market to grow, especially for competitively-priced items designed for small spaces, such as drawers, cabinets and cupboards. Manufacturers offering a range of styles are likely to find an ideal market base, if the focus is on the tasteful use of color and simple designs at reasonable prices.
- Therefore, the above-mentioned factors are expected to drive the demand for the market studied in the region in coming years.
The global engineered wood market is partially consolidated with players accounting for a marginal share of the market. Few companies include Weyerhaeuser Company, Boise Cascade, Georgia-Pacific, Roseburg Forest Products, and Louisiana-Pacific Corporation.
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