US demand to post doubledigit growth through 2015
US demand for wall coverings is forecast to advance 10.4 percent annually from a weak 2010 base through 2015. Gains will derive mainly from a recovery in new residential construction, a key market for wall coverings that suffered significantly from the collapse of the US housing market. In particular, decorative tile and wall paneling products, which account for the bulk of demand, are expected to post strong gains.
Demand for wallpaper will also record positive growth through 2015, reflecting strong growth in both residential and nonresidential construction activity and continuing development of new wallpaper products. Wallpaper had been in a steady decline for more than a decade, reflecting changing consumer tastes, the dominance of paints and coatings as the first choice in wall decoration and the difficulty inherent in applying and removing wallpaper. However, the development of a variety of new wallpaper products, such as wall cutouts, wall murals and custom wallpaper products will lead to a recovery for the product segment.
New construction to bolster residential market growth
Residential markets are the primary outlet for wall coverings demand, accounting for nearly three-fifths of total demand in 2010. Consumption is about evenly divided between new construction and improvement and repair applications, but through 2015 new construction will expand its share of the market as residential housing recovers from a very weak 2010 base. Growth in nonresidential markets will trail gains in residential markets, but will post much improved results compared to the 2000-2010 time frame.
South, West regions to remain dominant, exhibit most rapid demand gains
On a regional basis, demand for wall coverings is heavily concentrated in the South and West regions, which combined to account for about two-thirds of the total in 2010. This reflects the size of the housing and construction markets, coupled with the size of the population, in these regions. The South and West will also post the most rapid growth in demand through 2015, as they continue to gain population, supporting growth in construction activity and, by extension, demand for wall covering products.
US Demand for Wall Coverings to Reach $2.2 Billion in 2015
Demand for wall coverings is projected to advance 8.2 percent annually from a weak 2010 base to $2.2 billion in 2015. This represents a dramatic improvement over the performance of the 2005-2010 period, when demand for wall coverings fell sharply in the wake of the economic recession and the collapse of the US construction market, particularly residential construction. Just as the residential sector suffered the most from the downturn in construction, so will it also lead the way back, with demand for wall coverings in this key market segment advancing more than eleven percent per annum through 2015. These and other trends are presented in Wall Coverings, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
Demand for wall panel products is forecast to increase 9.0 percent annually to $1.2 billion in 2015. Sales of wall panel products will benefit from the expected recovery in residential construction activity, coupled with improving prospects in nonresidential construction markets. Laminate panels, in particular sheet panels, will continue to dominate demand, but greater growth prospects will emerge for several products at opposite ends of the value spectrum.
Demand for wallpaper products is projected to increase 7.3 percent annually to $480 million in 2015. Sales of wallpaper products have been in decline for more than a decade, reflecting changes in consumer preferences away from wallpaper in favor of paints and coatings. However, the development of products such as wallpaper borders, custom wallpaper and textured wallpaper is expected to breathe new life into a previously depressed product category. Also, advances in wallpaper technology, which make these products easier to apply and remove, will expand sales opportunities.
Demand for decorative tile wall coverings is projected to increase 7.1 percent annually to $450 million in 2015. Gains will derive primarily from a recovery in new housing construction, although consumption will also benefit from accelerating new nonresidential construction. In addition, the recovery in construction markets will also lead to growth in improvement and repair spending in both residential and nonresidential markets, supporting increased demand for ceramic tile in bathroom and kitchen renovations. Higher end products, such as glass tile, will provide outsized niche growth prospects.