Engineered Wood Market Outlook, 2029

Wood has been a fundamental building material for centuries, contributing to the construction of homes, furniture, and various other structures. However, with advancements in technology and a growing emphasis on sustainability, traditional solid wood is being complemented and sometimes replaced by engineered wood. Engineered wood products offer a range of benefits, combining the natural beauty of wood with enhanced strength, stability, and environmental considerations. Engineered wood is a composite material made by bonding together layers of wood veneers or fibers with adhesives to create a versatile and robust product.

Unlike solid wood, which is cut directly from a tree, engineered wood undergoes a manufacturing process that involves the use of different wood elements, this results in a more uniform and stable material that is less prone to warping, cracking, or twisting. The engineered wood industry has witnessed remarkable growth and transformation in recent years, driven by technological advancements, environmental consciousness, and the increasing demand for sustainable building materials. Engineered wood products, including plywood, particleboard, and laminated veneer lumber, have become integral components in modern construction and woodworking, offering a versatile and eco-friendly alternative to traditional solid wood.

The integration of digital technologies, such as artificial intelligence and data analytics, is becoming more prevalent in the engineered wood industry. These technologies are applied in production processes, quality control, and supply chain management, leading to improved efficiency and product consistency. The engineered wood industry is at the forefront of the construction and woodworking sectors, offering sustainable solutions without compromising on performance. As global awareness of environmental issues grows, the demand for engineered wood products is expected to rise. The industry's commitment to innovation, sustainability, and customization positions it as a key player in the future of construction and design.

According to the research report, 'Global Engineered Wood Market Outlook, 2028', the market is anticipated to cross USD 400 Billion by 2029, increasing from USD 292.68 Billion in 2023. The market is expected to grow with 6.61% CAGR by 2024-29. Advancements in manufacturing processes have played a pivotal role in the industry's growth. Computer-controlled precision cutting, automated gluing systems, and high-pressure lamination techniques contribute to the production of high-quality engineered wood products with consistent strength and durability. Sustainability is a cornerstone of the engineered wood industry. Many manufacturers prioritize the use of fast-growing and renewable wood species, along with responsible forestry practices.

Additionally, the industry is committed to minimizing waste and energy consumption during the manufacturing process. Engineered wood exhibits improved dimensional stability compared to solid wood. This makes it less susceptible to expansion, contraction, and warping, especially in response to changes in humidity and temperature. The manufacturing process of engineered wood allows for the optimization of strength properties. Plywood and LVL, for instance, can be engineered to provide enhanced load-bearing capacity, making them suitable for structural applications. Engineered wood often utilizes fast-growing and renewable wood species, reducing the environmental impact.

Additionally, the manufacturing process minimizes waste, making it an eco-friendly choice. Engineered wood products are often more cost-effective than their solid wood counterparts. They offer a balance between performance and affordability, making them a practical choice for a wide range of applications. Engineered wood can be customized to meet specific design and performance requirements. Whether it's for structural elements, furniture, or flooring, engineered wood offers versatility in terms of size, shape, and finish.

Market Drivers

• Sustainability and Environmental Concerns: Traditional solid wood industries have faced challenges related to deforestation and environmental impact. Engineered wood, with its utilization of fast-growing and renewable wood species, as well as the ability to minimize waste in manufacturing processes, addresses these concerns. As awareness of climate change and ecological conservation grows, the demand for sustainable building materials like engineered wood is on the rise.
• Urbanization and Construction Boom: The global trend toward urbanization and the ongoing construction boom in various parts of the world are significant drivers for the engineered wood industry. As populations concentrate in urban areas, there is a heightened demand for construction materials that are not only sustainable but also cost-effective and versatile. Engineered wood products, offering strength, stability, and customization options, have become preferred choices for architects, builders, and developers involved in constructing residential and commercial structures.

Market Challenges

• Raw Material Costs and Availability: Fluctuations in raw material costs and availability pose a significant challenge for the engineered wood industry. The demand for wood, both solid and engineered, competes with various sectors, including furniture, paper, and energy. The industry must navigate the complexities of securing a consistent supply of quality raw materials while managing the impact of market fluctuations on production costs. This challenge requires strategic planning and sustainable forestry practices to ensure a stable and cost-effective supply chain.
• Regulatory Constraints and Standards: The engineered wood industry operates within a regulatory framework that governs issues such as environmental impact, safety standards, and building codes. Meeting and adapting to these regulations can be challenging as they evolve over time, varying across regions and countries. Compliance with standards, certifications, and ensuring that engineered wood products meet or exceed safety requirements is an ongoing challenge that demands continuous monitoring and adaptation to stay competitive in the market.

Market Trends

• Mass Timber Construction: The trend toward mass timber construction, utilizing engineered wood products like cross-laminated timber (CLT) and glue-laminated timber (GLT), is gaining momentum. Mass timber offers a sustainable and aesthetically pleasing alternative to traditional construction materials, with its potential for reduced carbon footprint and quicker construction times. As architects and developers increasingly recognize the benefits of mass timber, this trend is reshaping the construction landscape and driving innovation in engineered wood technologies.
• Digital Integration and Industry 4.0: The integration of digital technologies into the engineered wood industry, often referred to as Industry 4.0, is a notable trend. Automation, artificial intelligence, and data analytics are being applied to enhance efficiency in manufacturing processes, quality control, and supply chain management. This trend not only improves productivity but also contributes to better product consistency, cost optimization, and the overall competitiveness of the engineered wood industry in the evolving digital landscape.

COVID-19 Impact

The engineered wood industry relies on a complex global supply chain for raw materials, manufacturing equipment, and transportation. The pandemic disrupted supply chains as lockdowns, travel restrictions, and workforce shortages affected the production and transportation of goods. Delays in the availability of raw materials and components created challenges for manufacturers, impacting their ability to meet demand and fulfill orders promptly. The construction industry, a major consumer of engineered wood products, experienced fluctuations in demand during the pandemic. Construction projects were delayed or halted in many regions due to lockdowns, social distancing measures, and economic uncertainties.

This directly affected the demand for engineered wood products, leading to a slowdown in some segments of the industry. The residential construction sector, which is a significant market for engineered wood products, faced disruptions as a result of the pandemic. Lockdowns and economic uncertainties influenced consumer behavior, leading to a decrease in new housing starts and renovations. The slowdown in residential construction had a direct impact on the demand for engineered wood products used in home building and improvement projects. The pandemic introduced challenges related to workforce availability and safety.

Many manufacturing facilities experienced temporary closures or reduced capacity due to social distancing measures and lockdowns. This affected the production capabilities of the engineered wood industry, leading to delays and increased operational costs associated with implementing health and safety measures for workers. The pandemic brought about increased costs for manufacturers in the engineered wood industry. Supply chain disruptions, higher logistics costs, and safety measures to protect workers contributed to rising operational expenses. These increased costs were often passed on to consumers, affecting the overall competitiveness of engineered wood products compared to alternative materials.

Changes in consumer behavior during the pandemic also impacted the engineered wood industry. Remote work trends and the increased focus on home improvement projects led to shifts in the types of products in demand. For instance, there was an increased interest in engineered wood flooring and furniture as people spent more time at home, but other segments, such as commercial construction, experienced a decline.

The plywood segment is expected to register a significantly fast revenue growth rate during the forecast period as a result of its layered structure, plywood enhances the natural wood's intrinsic qualities while incorporating all of its advantages.

Plywood is renowned for its superior strength and durability. It is made by layering thin sheets of wood, with each layer's grain direction alternating, which enhances its structural integrity. This construction makes it resistant to warping, cracking, and splitting, making it a reliable choice for various applications. It is incredibly versatile, suitable for a wide range of applications, including furniture, cabinetry, flooring, and construction. Its adaptability stems from its ability to come in various thicknesses, grades, and sizes, making it easy to find the right type for any project. It also provides a cost-effective solution for projects requiring a strong, stable, and durable material.

Plywood offers a cost-effective alternative to solid wood in many applications. The manufacturing process allows for efficient utilization of wood resources, reducing waste and making plywood more affordable than solid wood of equivalent dimensions. This cost-effectiveness has contributed to plywood's popularity, especially in large-scale construction projects where budget considerations play a significant role. Plywood is available in various grades and types, allowing users to choose the most suitable product for their specific needs. Different grades indicate the quality and appearance of the plywood, while types include options such as softwood plywood, hardwood plywood, and marine plywood, each designed for specific applications.

This flexibility in product offerings enhances plywood's appeal across a diverse set of industries. Plywood is easy to work with due to its uniform structure and consistent strength. It can be cut, shaped, and drilled without the risk of splitting, which is often a concern with some solid wood species. The ease of workability makes plywood a preferred material for both professional craftsmen and DIY enthusiasts, contributing to its widespread use in construction and woodworking projects. Plywood is available in large panel sizes, which is advantageous for construction projects where larger sections of material are required. This feature reduces the need for joining multiple smaller pieces, streamlining the construction process and contributing to cost savings. The availability of large panel sizes also enhances the efficiency of plywood installation.

The construction segment holds the major market share as it is utilized in the construction sector for headers, rim boards, panels, and beams. Engineered wood is used in construction as an alternative to steel and concrete.

Engineered wood products, such as plywood, laminated veneer lumber (LVL), and glued laminated timber (GLT), are designed and manufactured to provide consistent and reliable structural strength. These materials often outperform traditional solid wood in terms of strength and load-bearing capacity. This makes them ideal for construction applications where structural integrity is crucial, including framing, roofing, and flooring. Engineered wood is less susceptible to warping, twisting, and shrinking compared to solid wood. The manufacturing process involves layering and bonding wood fibers or veneers in a way that minimizes the impact of changes in humidity and temperature on the material.

This dimensional stability is particularly important in construction applications, ensuring that structures maintain their integrity over time. Engineered wood products can be customized to suit various construction elements, including beams, columns, trusses, and joists. This versatility allows architects and builders to design structures with precision and efficiency, tailoring engineered wood components to meet specific load requirements and design specifications. Engineered wood products are often manufactured in large, standardized panels or beams, enabling faster construction times. The use of prefabricated components and panelized systems can significantly accelerate the building process.

This speed of construction is particularly advantageous in projects where time is a critical factor, such as in the construction of residential buildings, commercial structures, and prefabricated homes. Engineered wood often incorporates sustainable forestry practices and utilizes fast-growing wood species, reducing environmental impact. Additionally, the manufacturing process of engineered wood typically generates less waste compared to traditional milling of solid wood. The industry's commitment to sustainability aligns with the growing demand for eco-friendly construction materials, making engineered wood an attractive choice for environmentally conscious builders.

The residential segment accounted for a major revenue share in 2023 as it is widely used in building floors, walls, and roofs, giving dwellings strong and durable structures.

Immigration from rural to urban regions has fueled the growth of the new home market, which in turn stimulates the expansion of engineered wood sales in this market segment. Recent development has had the most significant impact on wood flooring sales in the past few years. Other reasons, such as household remodeling and repair work, have contributed to the expansion of the market share. With rising demand for I-beams, LVL, and plywood, it is anticipated that the global housing market and refurbishment will expand soon, benefiting construction segments. Engineered wood provides a high degree of design flexibility, allowing architects and builders to create a wide range of residential structures and features.

From framing and sheathing to flooring, cabinetry, and furniture, engineered wood products can be adapted to various design styles and preferences. This versatility makes engineered wood a preferred choice for residential projects that often require customized solutions. Engineered wood products are often designed for ease of installation, reducing labor costs and construction time. Prefabricated components and standardized panel sizes enable quicker assembly on residential construction sites. This time efficiency is particularly appealing in the residential sector, where homeowners typically want their homes built or renovated efficiently.

Engineered wood possesses excellent structural performance, providing the necessary strength and stability for various residential applications. Whether used in framing, subflooring, or roofing, engineered wood products deliver consistent performance, meeting or exceeding building code requirements. This reliability is crucial for ensuring the long-term stability and safety of residential structures. Residential structures are often exposed to varying environmental conditions, including changes in humidity and temperature. Engineered wood's dimensional stability, resulting from its manufacturing process, makes it less prone to warping, twisting, or expanding and contracting.

This characteristic is essential for maintaining the structural integrity and aesthetics of residential components like doors, windows, and flooring. Also, engineered wood has found extensive use in residential interior applications, contributing to innovative and modern interior designs. Engineered wood flooring, cabinetry, and furniture have become popular choices for homeowners seeking both aesthetics and durability. The ability to create aesthetically pleasing and customizable interiors makes engineered wood a leading material in residential design.

The Asia Pacific will command the market with the largest share while during the forecast period as Asia-Pacific is home to the world's most significant population; thus, wood goods are in high demand.

Rapid urbanization and worldwide market expansion are occurring in developing nations. The aggressive expansion targets, enterprises establishing a globally competitive position, rich human resources, and rapid urbanization are the primary reasons for the engineered wood markets in the Asia-Pacific region to expand. Additionally, the Indian government's Pradhan Mantri Awas Yojana aimed to construct 30,000 affordable homes by 2021. This increased demand for manufactured wood on the Indian market. Similarly, the Shenzhen Municipal Government in China aims to build one million affordable residences by 2035. Government initiatives are anticipated to increase the demand for engineered wood throughout the forecast period.

The Asia Pacific region is experiencing rapid urbanization, industrialization, and infrastructure development, which is driving the demand for engineered wood products. Countries such as China, India, and Japan are witnessing significant growth in the construction sector, leading to increased consumption of engineered wood materials. Additionally, rising disposable incomes, changing lifestyles, and a growing preference for eco-friendly construction materials are further fueling the demand for engineered wood in the region. The Asia Pacific region is expected to continue its robust growth in the coming years, supported by favorable government initiatives and increasing awareness about sustainable building practices.

The global market is experiencing significant growth due to various factors such as the increasing demand for sustainable construction materials, rising urbanization, and advancements in manufacturing technologies. Engineered wood, also known as composite wood or man-made wood is manufactured by binding together strands, particles, fibers, or veneers of wood with adhesives to create a strong and versatile material.

It offers several advantages over traditional solid wood, including enhanced strength, dimensional stability, and resistance to moisture and pests. The market is witnessing a surge in demand from the construction and furniture industries, driven by the need for cost-effective and sustainable alternatives to solid wood. Additionally, the growing focus on green building practices and sustainable development is expected to drive the market's growth in the coming years.

• In April 2023, WoodTech Innovations unveiled a breakthrough in engineered wood technology with the introduction of a lightweight yet strong and durable engineered wood beam. The innovative design combines different wood species and engineered materials to create a beam that offers superior load-bearing capacity and structural performance. This advancement in engineered wood beams opens up possibilities for cost-effective and sustainable construction solutions in the residential and commercial sectors.
• In May 2023, GreenWood Corp launched a range of engineered wood products with improved moisture resistance and dimensional stability. The company's advanced treatment process ensures that the engineered wood retains its structural integrity even in high humidity and wet environments, making it suitable for outdoor applications such as decking and siding. This development expands the application scope of engineered wood and provides architects and builders with more versatile options.
• In June 2023, TimberTech Solutions introduced a new line of engineered wood flooring with enhanced scratch and wear resistance. The innovative surface treatment technology used in the flooring provides superior durability and longevity, making it ideal for high-traffic areas in residential and commercial settings. The development of highly durable engineered wood flooring offers an attractive alternative to traditional hardwood flooring, combining the aesthetic appeal of wood with enhanced performance characteristics.
• In Oct 2023, Boise Cascade announced that it has completed the previously announced acquisition of Brockway-Smith Company (BROSCO®), a leading wholesale distributor specializing in doors and millwork.
• In Sep 2023, West Fraser Timber Co. Ltd. announced that it has entered into an agreement to acquire Spray Lake Sawmills located in Cochrane, Alberta. This acquisition enables West Fraser to grow its footprint in Southern Alberta and expand its Canadian treated wood business, while providing access to a high-quality timber supply.

Considered in this report

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report

• Engineered Wood market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Type

• Plywood
• Medium Density Fiberboard
• Oriented Strand Boards (OSB)
• Particle Board
• Others

By Application

• Construction
• Furniture
• Flooring
• Packaging
• Others

By End User

• Residential
• Commercial & Industrial

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Engineered Wood industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.


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