Lumber Industry: A Global Market Overview
Lumber Industry Overview
Effective and efficient supply chain is the backbone of any industry, including the lumber industry. The global lumber industry is primarily driven by the increasing demand from the construction industry, owing to its benefits such as superior stability, low carbon footprint, strength, and durability. According to a recent report, growing consumer awareness regarding the benefits of using lumber will favor the growth of the lumber industry. Lumber industry products are also being used in the green building materials owing to their lower carbon footprint. Also, lumber products are the preferred choice for flooring, furniture, architectural designs, and cabinets owing to its superior strength and durability. (Source: SpendEdge’s procurement market intelligence report on global lumber industry)
Market Growth and Emerging Markets
The global lumber industry is estimated to grow at a CAGR of over 4% over the next four years. According to our report, the use of CLT in construction is increasing, and its use is estimated to expand during the next four years. Europe and North America are the leading producers of lumber and together account for more than 60% of the total global lumber industry’s production. Therefore, these regions have a great influence on the category supply. Developed economies like the US, Japan, and the UK consume 75%-80% of the global wood produced. However, in APAC, the demand for wood-based products has been increasing rapidly and this makes it one of the fastest growing regions in the global lumber market. Additionally, certified forest areas in APAC have also grown by 35%-40% over the past five years. In this region, countries like India and China are expected to drive the demand for lumber, leading to the growth of the lumber industry. The demand for lumber in MEA is also expected to rise due to the construction industry’s growth in countries like Saudi Arabia and UAE. Although lumber consumption is less in South America, it is estimated that this region will be one of the key category suppliers in the future owing to the growth in investments in the timberlands of Uruguay and Brazil.
Lumber Industry Trends
- Rising construction activities, globally
- High demand from the residential industry
- Demand from the paper industry and its use in paper-based products
- Growing demand from the furniture industry
There are two main types of pricing models for products in the lumber industry – volume-based pricing and spot pricing. In volume-based pricing, buyers take advantage of low prices in the market by optimizing the timing of procurement to match with the drop in market prices. Spot pricing helps in the purchase of lumber in large quantities. This provides supply assurance to the buyers during fluctuations in the supply-demand scenario.
SpendEdge’s procurement report on the lumber industry offers a comprehensive overview of the top lumber products suppliers, pricing insights, pricing models, cost-saving opportunities, category management strategy, and procurement excellence best practices. If you are looking for some other information, request for a customized market report by getting in touch with our analysts.
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