An industrial research company released the findings of a U.S. siding distribution study that found siding sales is expected to increase 7.7% annually through the next four years. The research company’s summary predicts the U.S. market, worth about $3.3 billion in 2016, will be worth $4.7 billion by 2021.
In a report dated April 11, the Cleveland-based company, The Freedonia Group, stated the growth in distribution will be due to construction professionals subcontracting siding installation jobs to small- and medium-sized contractors. Distributors offering services such as jobsite delivery, technical advice, and ability to purchase in small quantities, will entice smaller contractors to purchase siding directly from distributors instead of sales agents.
Courtesy The Freedonia Group
With an increase in housing starts and home renovation projects, the residential market accounted for the majority of siding sales in 2016 with a 5.5% compound annual growth rate (CAGR), compared to commercial projects with 3.6% CAGR.
Top distributors including ABC Supply, Alside, Beacon Roofing Supply, Builders FirstSource, Home Depot, and Lowe’s represent 32% of distribution. In the next few years, these firms will continue to expand in the market by opening new locations, providing value-added services, and offering other siding-related materials, including roofing or exterior trim.
The study also found the southern region accounted for the largest market of siding sales, with 43% in 2016. It notes the sales increased because of existing home purchases and severe weather events that caused damage to siding in southern states last year.
Courtesy The Freedonia Group
The Midwest followed with 22.7%, the northeast with 17.6%, and the west with 16.7%. By 2021, the West expects to experience the most rapid gains due to growth in the housing market, while the Midwest and Northeast will rise at more modest pace.