Don Ferrier is your customer, even though he doesn't buy the bulk of his framing lumber from you anymore. In fact, except for what he needs for interior walls, Ferrier doesn't buy framing lumber at all. For the envelopes of the half-dozen custom homes he builds every year in the Fort Worth, Texas, area, he uses structural insulated panels (SIPs). And he's not the only one.
Conventional wood framing still dominates the U.S. home building industry, commanding a nearly 80% share of above-grade walls, according to the NAHB Research Center. But SIPs, insulated concrete forms (ICFs), structural steel framing, and precast concrete panels–materials and systems that LBM dealers rarely stock or even source–have helped steadily reduce framing lumber's market share by more than 10% in the last decade.
With the combined pressures of increasing energy costs (and consumer consciousness), ever-faster cycle times, skilled-labor shortages, concern about customer satisfaction rankings, and waning lumber quality, housing insiders predict the trend will continue.
All of which is not to say that dealers are, or will be, left out of the loop. A few have taken to stocking, sourcing, and/or delivering such systems, while others inventory accessories, fill-ins, tools, and fasteners to support customers who have made the switch to alternative methods and materials.
Still, a combined estimated market share of 10% is hardly enough critical mass of contractor demand to push or threaten most dealers to change their SKUs. Both SIPs and ICFs take up a lot of yard space for such relatively low demand; despite being high-margin products, they are also perhaps 5% to 10% more expensive on a per-foot, materials-only basis compared to framing lumber. Those factors, among other hindrances, have led manufacturers to employ mostly direct or two-step supply chain models–so far. "We'd love to sell through lumberyards, but we still need to watchdog how the product is sold and serviced," says Damien Pataluna, president of FischerSIPS, a manufacturer in Louisville, Ky. "Once we get standardized, like the engineered lumber industry, that will open the doors to dealers."
Until then, forward-thinking dealers can educate themselves about ICFs, SIPs, steel framing, and precast concrete in anticipation of increasing builder demand, starting now.