Wall Coverings. US Industry Study with Forecasts to 2007 & The First Choice In Industry Research. The Freedonia Group
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1 Wall Coverings US Industry Study with Forecasts to 2007 & 2012 STUDY #1717 September 2003 $3800 The Freedonia Group The First Choice In Industry Research 767 Beta Drive Cleveland, OH USA Tel: (US) or Fax:
2 Wall Coverings US Industry Study with Forecasts to 2007 & 2012 Study #1717 September 2003 $ Pages As the faux finishing trend is expected to subside through 2007, wallpaper demand will begin to recover, reaching $585 million on annual gains of 4.2 percent US wall coverings demand to advance 5.7% annually Demand for wall coverings used as alternatives to paint (i.e., ceramic tile, wood paneling, wallpaper and finished gypsum board) is forecast to expand 5.7 percent per annum through 2007 to $2.5 billion. Growth will accelerate significantly from the period for virtually every product and end-use market. Advances in wall covering demand will be driven by both construction expenditures and fashion trends, although the effects of these two factors vary based on the specific product under consideration. Wall Coverings Demand by Product, 2007 ($2.5 billion) Ceramic Tole 35% Wood Paneling 23% Wallpaper 23% In terms of surface area, demand for wall coverings is forecast to increase 4.3 percent per year to 7.5 billion square feet in This forecast will slightly lag the growth expected for dollar value demand. However, the share of total interior space covered by wall coverings will increase through 2007 as wall coverings somewhat encroach on the dominant share held by paint. Wallpaper demand begins recovery The wallpaper market clearly illustrates the connection between home design trends and wall covering demand. Demand for wallpaper decreased significantly over the period, almost entirely as a result of a shift in consumer preferences toward decorative painting techniques such as faux finishing. As the faux finishing trend is expected to subside through 2007, wallpaper demand will begin to recover, reaching $585 million on annual gains of 4.2 percent. Growth in wallpaper demand will also be stimulated, albeit to a lesser extent, by economic factors such as an upturn in the construction of key nonresidential structures (e.g., hospitality and assisted living facilities). Manufactured housing to boost finished gypsum board demand In the finished gypsum board product segment, demand is dependent almost Finished Gypsum Board 19% entirely on patterns in the construction of new manufactured housing, the dominant end use for these products. The correlation between finished gypsum board demand and manufactured housing shipments is further accentuated by the high proportion of gypsum board use in these homes relative to alternative wall surfacing methods. As a result of this close relationship, the expected recovery in manufactured housing shipments from lending and repossession problems of will lead to double-digits gains in finished gypsum board demand through Visit for complete text and table of contents
3 Table of Contents Letter From the CEO INTRODUCTION EXECUTIVE SUMMARY... 1 MARKET ENVIRONMENT General... 4 Macroeconomic Environment... 5 Consumer Income & Spending... 8 Personal Income & Expenditures.. 8 Consumer Financing Demographic Trends Population Households Building Construction Trends Residential Construction Housing Completions Housing Stock Single-Family Home Sales Repair & Improvement Activity.. 26 Nonresidential Construction New Construction Nonresidential Building Space Repair & Improvement Activity.. 31 Market Trends Pricing Patterns Environmental Issues Manufacturing Operations Indoor Air Quality World Wall Covering Overview US Foreign Trade Imports Exports Competitive Wall Covering Outlook PRODUCTS General Ceramic Tile Products Wall Tile Other Ceramic Tiles Supply & Producers Wood Paneling Products Sheet Paneling Solid Wood Paneling Supply & Producers Wallpaper Products Fabric-Backed Vinyl Paper-Backed Vinyl Vinyl-Coated Paper Other Supply & Producers Finished Gypsum Board Products Finished Mobile Home Gypsum Board Other Finished Gypsum Board.. 94 Supply & Producers Dear Colleague: As the world economy emerges from its recent period of doldrums, businesses are planning how to benefit from the new opportunities that an upswing will bring. In making those plans, strategic planners like you require credible industry information on which to base decisions. At Freedonia, it is our mission to provide you with an unbiased, reliable outlook for each industry that we study. We carefully examine available sources, separate the wheat from the chaff, and distill an ocean of data into a concise presentation of where an industry stands today... and where it is going. At Freedonia, it is our mission to provide you with an unbiased, reliable outlook for each industry... Each Freedonia industry study provides you with the information and analysis you need to make important decisions. How large is your target market? Which product segments are growing fastest? Which markets are growing fastest? Our analysts review the relevant secondary sources and talk directly to participants in the industry to find the answers. Our Wall Coverings study takes a good look at the alternative materials to decorative paints, namely wallpaper, ceramic tile, wood panels and finished gypsum board. Historical supply and demand data, as well as forecasts are provided for each major covering. Learn about the showings of these materials and see how they stack up against paint and against each other in the coming years. I invite you to add the Freedonia Group to your team by acquiring our Wall Coverings study today. Very truly yours, Jeffrey Weiss, CEO
4 Table of Contents (cont.) MARKETS General Residential New Repair & Improvement Residence Type Single-Family Multifamily Manufactured Housing Nonresidential New Repair & Improvement Building Type Office & Commercial Institutional Industrial Other Nonresidential DEMAND BY REGION General Regional Demographic & Economic Trends Population Patterns Economic Outlook Construction Activity Housing Trends Regional Demand for Wall Coverings Northeast New England Middle Atlantic Midwest East North Central West North Central South South Atlantic East South Central West South Central West Mountain Pacific INDUSTRY STRUCTURE General Industry Composition & Market Share Ceramic Tile Wood Paneling Wallpaper Finished Gypsum Board Competitive Strategies Product Development Ceramic Tile Wallpaper Other Wall Coverings Manufacturing Marketing Distribution & Installation Distribution Installation Cooperative Agreements Company Profiles Wall Covering Demand by Market, (million dollars) Residential Georgia-Pacific Corporation 133 Peachtree Street Northeast Atlanta, GA Sales: $23.3 billion (2002) US Sales: $20 billion (2002) Employment: 61,000 (2002) Nonresidential COMPANY PROFILES Key Products: decorative wall panels and gypsum wallboard Georgia-Pacific Corporation (G-P) operates through four segments: Consumer Products, Packaging, Bleached Pulp and Paper, and Building Products. In May 2002, G-P announced plans to split its consumer products and packaging, and building products and distribution operations into two separate, publicly traded companies; however, in March 2003, G-P withdrew its plans to hold a public offering for these businesses due to changed market conditions. The Company participates in the US wall covering industry through the Building Products segment, which had 2002 sales of $7.1 billion. The segment manufactures and distributes wood panels, lumber, gypsum products, chemicals and other products. These products are made at facilities in the US (127), Canada (7) and South
5 Freedonia Study # WALL COVERINGS New Nonresidential Wall Covering Demand by Product Type (million dollars) Item Nonres Bldg Constr Expend $ wall covering/000$ expend West - Pacific MARKETS The Markets Section analyzes trends and considers the threats and opportunities in each major market New Nonres Wall Covering De Ceramic Tile Wood Paneling Wallpaper Finished Gypsum Board DEMAND BY REGION % new Nonresidential Wall Covering Dd Demand for wall coverings in the Pacific subregion is projected to increase 4.4 percent per annum through 2007 to $400 million. Advances in Pacific wall covering demand will be checked by moderating economic growth and weakness in new housing SAMPLE construction. PAGE However, although the new housing market is projected to decelerate over the forecast period, Text the sections effects of support this softness each will be moderated by above-average table s numbers economic & projections and population growth, which will bolster demand in residential repair and improvement markets. The outlook for overall construction spending in the Pacific subregion will also be strong through 2007, driven by healthy expenditures in the nonresidential sector. For example, school construction is expected to increase as communities contend with the effects of recent population increases and laws mandating smaller class sizes. The Pacific subregion consists of Alaska, California, Hawaii, Oregon and Washington. This area saw even Wallpaper faster population Demand by Product growth than the Mountain states over the (million past several dollars) decades, and from a much larger base. This was not the case in the 1990s, however, as population gains Itemdeceler ated in response to an economic restructuring. Until the early 1990s, economic growth in the Pacific subregion Wall Covering had Demand kept pace with population growth, fostering a relatively % wallpaper prosperous environment. However, decreased federal Wallpaper Demand PRODUCTS Fabric-Backed Vinyl 165 The 183Products 174 Section Paper-Backed Vinyl 305 provides demand 185 for 210 Vinyl-Coated Paper 209 historical years 125 and 135 Other 62 forecasts 70 growth 47 to and 2012 $/sq ft Wallpaper Demand (mil sq ft)
6 Order Information About The Freedonia Group To order, fill out the coupon below and mail to The Freedonia Group, or place your order by phone toll free, (US) or , or by fax, , or Free Handling & Shipping There is NO charge for handling and UPS shipping in the US. Expect delivery in 3 to 5 business days. Outside the US, Freedonia provides free airmail service. If you require express delivery, Freedonia provides this to you at cost. Credit Card Orders You may charge your order to either American Express, MasterCard or Visa. Please include your credit card account number, expiration date, and your signature. Orders Outside of the US Checks must be made payable in US funds, drawn against a US bank and mailed directly to The Freedonia Group. Wire transfers should be sent to: Fifth Third Bank, Cincinnati, OH; SWIFT No. FTCUS3C; ABA # ; Account # (please include study number and/or invoice number with all wire transfers). Or you may use a credit card. Corporate Use License Now every decision maker in your organization can act on the key intelligence found in all Freedonia studies. For and additional $2000, you receive unlimited use of an electronic version (PDF) of the study. Place it on your intranet, it to coworkers around the world, or print it as many times as you like! Order it today. The Freedonia Group, Inc. The Freedonia Group is a leading international database business research company. Since 1985, Freedonia has published 2,000 multiclient industry studies that have proven to be outstanding aids to market and corporate analysis and strategic planning. Freedonia can save you time and money on research you would otherwise have to do yourself or contract out. Freedonia studies cover a broad range of industrial topics in many areas including the following: Chemicals Construction & Building Materials Energy & Power Equipment Industrial Components & Equipment Life Sciences: Biotech/Medical/Pharmaceutical Freedonia Methodology Packaging Plastics Security/Electronics/ Communications Automotive & Other Transportation Equipment World Studies Freedonia does not just collect and reprint data, Freedonia develops data. Our analysts thoroughly investigate an industry by interviewing key participants and analyzing information from sources such as associations, government and trade literature. Once this research is complete, Freedonia establishes one set of forecasts. All writing, editing and forecasting is done in-house to assure quality and Need analysis on a topic not covered by consistency. In cases where data Freedonia Industry studies? does not exist, Freedonia develops Call customer service for details on the data based on input/output Freedonia Custom Research ratios, bills of materials and flow charts. Order Form Title Name Wall Coverings... $3800 Title Company Corporate Use License (add to study price) +$2000 Additional Print $400 each Total (including selected option) $ Division Street City/State/Zip Country Enclosed is my check (5% discount) drawn on a US bank and payable to The Freedonia Group, Inc., in US funds (Ohio residents add 8% sales tax) Bill my company American Express MasterCard Visa Online Access: The complete text and tables from our studies and reports can be purchased at our website, and through major commercial online hosts. Phone Credit Card Number Fax Expiration Date Signature F-SM.1717 The Freedonia Group, Inc. 767 Beta Drive Cleveland, OH USA Web site: Tel: (US) or Fax: info@freedoniagroup.com
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