The siding and exterior trim market has experienced healthy growth during the past decade and was on pace for continued growth in 2020 before disruptions from the coronavirus (COVID-19) set in. The combined market, which reached a value of $10 billion in 2019 and was projected to grow 2% annually in 2020 by research organization Principia Consulting, could experience significant year-over-year contraction. While the lasting effects of COVID-19 are unknown, the virus’s disruption to construction is expected to impact building material categories, including siding and exterior trim.
“The takeaway in siding and trim given reasonable assumptions about the impact of remodeling and new construction is the market is going to be down 10-20% this year compared to last year,” said Casey Olson, an industry analyst for Principia Consulting.
Olson said with many businesses laying off employees, furloughing workers, and contracting salaries for an indeterminate period of time, discretionary spending is likely to be decreased, impacting the siding and trim market. According to Principia Consulting, siding and exterior trim projects are more likely to be discretionary rather than essential projects for homeowners, and therefore are more likely to be put off in times when finances are tight.
Cleveland-based research organization The Freedonia Group projects the slowdown in new home construction as a result of COVID-19 could have a “severe” impact on construction-related industries. Temporary layoffs and a steep decline in home building is expected to cause a short-term drop in business for producers of many items needed to finish a home, including siding and exterior trim. The siding and trim market’s heavy exposure in the new construction market could lead to a higher short-term impact.