US demand to reach 11.6 billion square feet in 2020
Demand for decorative laminates in the US is forecast to increase 2.5 percent per year to 11.6 billion square feet in 2020, valued at $6.8 billion. Growth in the production of building components (e.g., cabinets and wall panels), as well as in related products (e.g., furniture), and the continued use of engineered wood in the manufacture of many of these items will pose opportunities for decorative laminates. Advances in building construction activity and greater credit availability are driving demand for building components and related products, while low domestic energy costs and increasing wages in traditionally low wage countries are allowing US-manufactured goods to be more cost-competitive with imports.
Low-pressure laminates to generate most rapid gains
Cabinets and furniture were the two largest markets for laminates in 2015, together accounting for nearly half of demand. Of these, the cabinet market is projected to post the more rapid gains. Increases in the number of new homes built through 2020 will provide opportunities, since many of these new homes will include stock cabinets, which are often made using saturated paper and other low-pressure laminates on an engineered wood substrate. The much smaller flooring market will also achieve above average annual gains. Domestic manufacturing of laminate flooring is experiencing a boost after certain imported products received negative press in early 2015 regarding alleged product safety. Further gains will be limited by the growing popularity of luxury vinyl tile, which is providing strong competition for laminate.
Demand for low-pressure laminates, which account for more than 80 percent of the market, is forecast to generate the fastest average annual gains through 2020, benefiting from strong growth in the manufacture of certain end use products such as cabinets. Advances will be driven by the significant use of low-pressure laminates in the large cabinet and store fixture markets, where the cost advantages of these products outweigh the durability benefits of higher priced high-pressure laminates. In addition, low-pressure laminates are gaining use due to favorable performance characteristics. Vinyl films, in particular, can be more easily applied to substrates with raised panels (as in cabinet doors) and curved edges (as in store fixtures and furniture). In another example, saturated paper can provide a high gloss appearance, which is on trend in cabinets and other market categories. Performance improvements in all types of low-pressure laminates are continuing to fuel their adoption as a low cost decorative surfacing material. Sales of high-pressure laminates will continue to depend on their advanced performance characteristics such as long-term durability and greater resistance to scratches. Yet they will face increased competition from low-pressure laminates in key markets, limiting further gains.
Durability, low cost to be key factors to growth
Gains in decorative laminates demand will be attributable to their competitive edge over surfacing materials such as wood veneers and coatings. Laminates are valued for their ability to provide good durability in surface protection at a relatively low cost. However, laminates will face increased competitive pressures from relatively new products in certain applications. In cabinets, for example, laminates are facing increased competition from acrylic veneers in high value, high gloss applications. In addition, intra-competition will continue to increase, as saturated papers and vinyl films gain use to some extent at the expense of low-basis weight papers and high-pressure laminates.