June, 2006

Product Update: The (almost) $10 billion category

New study pegs demand for molding and trim products to reach $9.8 billion by 2009.

By Staff Report

The demand for molding and trim products in the U.S. is forecast to increase 1.7% annually from a strong 2004 base to $9.8 billion in 2009, according to a new study from the Freedonia Group, Inc., a Cleveland-based industrial market research firm. This represents a significant slowdown from the advances recorded in the 1999 to 2004 period, reflecting a less robust building construction environment going forward, according to the study, Molding & Trim. 

In the residential construction market, housing completions are expected to fall from their high 2004 levels, primarily due to slowing in the single family homes segment, the study reports. Conversely, nonresidential construction is expected to post a strong recovery following a period of extreme weakness. As a result, demand growth for molding and trim products will be stronger in nonresidential construction, while gains in the residential market will be flat.

Demand for molding products is projected to increase 1.3% annually to $4.6 billion in 2009, the study reports. Moldings, primarily made from wood, are principally used in residential building, with the greatest concentration in single-family housing. Declining single-family home building will negatively affect molding demand, although opportunities will exist in residential repair and improvement applications, and in both new and aftermarket nonresidential markets.

The study forecasts demand for stairwork to advance 1.9% per annum to $2.6 billion in 2009. Growth opportunities will be heavily concentrated in the nonresidential market, particularly for metal stairwork products. Demand for other products, which mainly include exterior molding and trim products, is forecast to expand 2.1% annually to $2.6 billion in 2009. Growth opportunities will emerge primarily in plastic exterior trim products, particularly for use in nonresidential construction applications. Residential repair and improvement uses will also offer growth potential.

Molding & Trim Demand                                                (million dollars)                      % Annual GrowthItem                                              1999    2004    2009                        04/99                   09/04      

Molding & Trim Demand       7138    9047    9825                4.9                   1.7      

            Molding                  3349    4348    4630                5.4                   1.3      

            Stairwork                1863    2352    2590                4.8                   1.9      

            Other                     1926    2347    2605                4.0                   2.1      

© 2006 by The Freedonia Group, Inc

Wood is the primary material used to manufacture molding and trim products, accounting for two-thirds of total demand in 2004, according to the study. Gains will be primarily concentrated in the nonresidential market, offset by declining use of both molding and stairwork in the new residential market. Plastic molding and trim products offer the best opportunities for growth, and are forecast to advance 6.2% annually to $1.3 billion in 2009. While the greatest gains will occur in the nonresidential market, plastics will continue to make inroads even in residential construction applications, where they are replacing wood products.

Metal products will also show strong growth, benefiting from increasing new nonresidential building activity, and both residential and nonresidential

repair and improvement activity.

Molding & Trim is available for $4,200. For more information, visit www.freedoniagroup.com.