By 2015 the total opportunity for wood tall buildings (5-30 stories at 100% market penetration) is assessed at 4-7 BBF of lumber and engineered wood products. This volume comes from 339 million square feet, broken down as follows: 208 million sqft nonresidential and 131 million sqft residential, or 282 million sqft US and 57 million sqft Canada.
This opportunity may appear rather modest in terms of volumes of lumber, especially as the US market recovers. However, there is a clear opportunity for those willing to step up and get into the development and or construction with wood-based building systems.
In the US, the 5+ storey class accounts for 17% of the nonresidential area and 24% of the residential area, with an overall 18% share (US, 2008-2012 average). In Canada, the ratio of high-rise/low-rise is quite different, especially in the residential sector with a 66% share for the 5+ storey class (Canada, 2008-2012). When looking at all storey classes, three quarters of all residential area in the US occurs in the 1-4 class whereas in Canada the 1-4 storey class accounts for only one third of the floor area.
Even though the 1-4 storey class accounts for most of the total construction floor area the 5-30 storey class new construction market as of 2012 was worth over $164 billion in the US alone (75% nonresidential). It is, therefore, clear how innovative companies will be more likely to capitalize on the opportunity by leveraging on the added value associated with design and precision manufacturing of engineered wood products As a point in case, the FOB price at the mill for an engineered wood product can be as high as 4 times that of lumber.
Overall, Canada’s market is smaller than the US, however in the 11-30 stories class Canada’s residential market is only slightly smaller than the US (22 vs. 27 million sqft). By 2017 Canada is expected to surpass the US in this height class.