Recession likely to Stunt (but not Stop) Growth of High-End Siding

The recession is affecting the sales of nearly everything from school lunches to automobile sales. So, too, within the home improvement market, homeowners are looking for ways to cut back expenses. While some homeowners will undoubtedly postpone replacing siding that has begun to wear, fade, or even peel, others will opt for cheaper materials out of financial necessity. Still, the long-term trends from any reliable media source will tell you that the siding industry continues to gravitate toward higher-end materials.

The Difference a Couple Years can Make
Siding sales in the U.S. are projected to remain virtually flat through 2010, according to the market research group Freedonia. In fact, only the strong growth in non-residential sectors allows the industry to offset setbacks in the residential market, specifically fewer housing starts. On the other hand, the same research group is projecting that, through 2012, the siding industry will grow 1.6 percent annually, compensating in these final two years by a recovering home building industry. Moreover, although demand is supposed to increase by 1.6 percent, total expenditures are supposed to increase 3.4 percent annually due to this shift toward higher-end materials, according to Freedonia.

Sales and Market Shares of Specific Materials

Vinyl (30-40 percent): The U.S. Census Bureau puts the market share of vinyl siding in the low to mid thirties, while other industry resources put this figure closer to 40 percent. Meanwhile, vinyl siding sales are supposed to increase 1.6 percent through 2012, matching the siding industry as a whole.

Fiber-Cement (15-25 percent): Fiber-cement is growing at such a pace that it's hard for statistical analysis to keep up. Just a few years ago, fiber-cement's market share was listed as 12-14 percent by CertainTeed. Now, fiber-cement is almost surely nearing or surpassing the 20 percent mark. Over the next few years sales are supposed to surge 5.1 percent annually, the largest such increase of any siding material.

Stucco and Faux Stone (15-25 percent): This category is composed of several plaster, composite, and stone veneer products. Largely marketed to homeowners, stucco and faux stone comprise 25 percent of the residential market with an overall market share barely over 15 percent. That said, the 2.1 percent growth of these products over the next few years may come largely from the introduction of stone-facing materials in the non-residential market.

Wood and Metal (10-20 percent): As wood siding sales declines 1.9 percent because of eroded demand in the residential market, metal siding is supposed to increase 1.6 percent due to sustained demand in the non-residential market. For homeowners, both wood and aluminum siding are becoming largely obsolete.

Brick (10-15 percent): Likely the most stable siding material in the whole industry, the niche, upscale residential market that brick siding enjoys may be dented slightly by the recession, but sales are still projected to increase 1.7 percent annually through 2012.

Regional Factors for the Future of the Siding Industry
Naturally, most siding materials work better in some climates than others. Fiber-cement performs so well in the South that this recent material has already begun to see demand mature in this region. Indeed, strong population growth throughout the southern states has led to correspondingly high siding demand. This region also includes the most diverse siding material profile with most siding materials well-represented. In the Midwest and East, vinyl demonstrates more complete dominance than other areas, while in the West, wood, fiber-cement, and stucco show a substantial spike in popularity.

Risks and Rewards, Pain and Pleasure
Despite the low cost and easy installation of basic vinyl siding, it's hard to argue that it's the most cost-effective material over the long run. Many homeowners are now running into the problem trying to find the money to purchase the siding materials that will represent a solid investment in their home. The pain of trying to secure financing for a quality home improvement installation, even for homeowners with reasonable credit, is yet one more source of disillusionment Americans are experiencing with their lending institutions. Still, if you can find a way to upgrade to fiber-cement, simulated stone, or new, performance-enhanced vinyl, you're nearly guaranteed to take pleasure in the look and insulating quality of your siding for many decades to come.

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