The Wood Product Manufacturing industry produces a diverse range of wood products, including wood ladders, cabinets, toothpicks, wood flour and kiln-dried lumber. The construction sector is the industry’s largest source of demand and manufacturers have benefited going into 2022 from solid growth in housing starts and consumer spending, boosting demand from households for other wood products. However, demand has slowly shrunk since 2021 because of the former economic effects of the COVID-19 pandemic and the rising potential of a recession. Total revenue has ballooned at a CAGR of 1.8% to reach $9.7 billion through the end of 2024, including an expected sink of 1.0% in 2024 alone.

The industry’s largest downstream market is the construction sector, which boomed in 2021 amid urban flight brought on by the COVID-19 pandemic. Construction sharply fell in 2022 and 2023 because of high-interest rates imposed by the Fed to combat inflation. Still, increased per-capita income and consumer spending in these years provided a buffer for further revenue loss. However, smaller manufacturers could not weather this volatile environment as well as their larger counterparts, resulting in a spike in consolidation. Total revenue has ballooned at a CAGR of 1.8% to reach $9.7 billion through the end of 2024, including an expected slump of 1.0% in 2024 alone.

The value of residential construction is expected to climb, helping demand from one of the industry’s key markets. Also, due to an anticipated devaluation of the US dollar, industry exports are expected to hike as foreign demand for wood pellets used for renewable energy grows. Domestically, increases in consumer spending will likely partially sustain industry demand. Ultimately, revenue is expected to increase at a CAGR of 1.4% to $10.4 billion through the end of 2029.