As lifestyle changes evolve over time, certain market segments are often left to deal with the effects of such changes. That would certainly go a long way towards explaining what has been transpiring in the outdoor wood shed market over the past few years and likely into the future.
Throughout North America, we have seen Americans and Canadians moving towards a much more health-conscious lifestyle. We have also seen a trend toward families being a lot more mobile than they use to be in terms of making moves into new communities. Both of these phenomena have played a major role in moving the outdoor wood shed market ahead in recent years.
In the following section, the discussion is going to focus on the current evolution of the outdoor shed market/wood shed market with a look at projections heading into the future.
Why the Increased Need for More Storage?
With home and commercial property prices climbing to all-time highs, every inch of space that a facility can offer has tremendous value. Therefore, home and business owners are buying smaller facilities and looking for alternative ways to supplement that available space with something more affordable for storage. Time and again, the answer seems to be outdoor sheds for both commercial interests and homeowners.
The biggest change in demand for outdoor sheds over the past few years has taken place in the residential space. The demand for extra residential storage space is driven by two key factors. First is the upwardly mobile X and Z generations' desire for luxury items. Their thirst for items like boats, bikes, camping equipment, and exercise/gardening equipment has created a need for extra and secure storage space. Admittedly, these are not the types of items that people will typically store in their houses. That makes outdoor storage the right call.
Second, people have become much more transient. With more people than ever working from home, business owners and employees are no longer required to stay close to their workplaces on a regular basis. As they move about in their transient lifestyles, they use storage facilities like outdoor wood sheds to lighten their loads while traveling about or maintaining multiple residences.
Both of these factors have led to what some experts would call explosive growth in the outdoor storage shed space. Let's take a closer look at the numbers.
The global outdoor shed market is expected to grow from US$ 6,590.60 million in 2021 to US$ 9,615.28 million by 2028; it is estimated to grow at a CAGR of 5.5% during 2021–2028.
A Look at Outdoor Shed Market From 2020 and Moving Forward
The outdoor shed market can be divided into three segments: residential, commercial, and industrial. Immediately, we know this discussion is going to focus mostly on the residential segment. We know that because of increases in demand for residential wood sheds while the demand for commercial and industrial outdoor sheds is usually pointed toward materials that are more sustainable.
Commercial and industrial sheds are generally used for larger ticket items with more focus on long-term storage. Generally, commercial/industrial sheds are used as warehouses for merchandise or machinery. Due to potential issues related to durability and maintenance, businesses and manufacturers tend to prefer larger commercial storage sheds that are made from metal or plastic materials.
The growth in the commercial/industrial outdoor shed market has been steady over the last few years. Where the growth has been most prominent in the residential space. As was mentioned above, the driver of this growth has been lifestyle changes in terms of health and mobility.
Looking at 2020, one has to remember that the world was mired in the COVID19 pandemic. For the most part, every supply/merchandise market came to a stretching halt. With that said, the outdoor shed market still reported relatively strong numbers at $6.3 billion for the fiscal year ended 2020. It would appear the industry's sales numbers remained strong because home-stranded DIYers spent more time on home projects. With more time to spend on the lawn, remodeling, and exercising, the demand for extra outdoor storage space remained strong.
Going into 2021, the outdoor shed industry was looking for solid growth while hopefully coming out of the pandemic. While $6.5 billion for the fiscal year ending 2021 might seem a bit disappointing, there are underlying reasons for optimism. It's a question of the market's momentum.
Early in 2021, the outdoor shed market appeared to be contracting as demand had not yet kicked in due to continued lockdowns throughout North America and many parts of Europe. Around the middle of the year, outdoor shed demand started growing. By the end of 2021, it was clear that a 5.5% "compound annual growth rate (CAGR)" would be sustainable until at least 2028.
With that kind of growth rate, experts are predicting that the outdoor shed market should reach approximately $9.6 billion in sales by 2028. The viability of this projection is only enforced by the fact that outdoor shed demand, particularly wood shed demand, is rapidly increasing in Europe as well as North America.
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A Focus on the Wood Shed Segment
The wood shed segment of the outdoor shed market requires further focus. This is due in large part to the increase in demand for residential wood sheds over the last 3 or 4 years.
Unless someone has been living in a cave, it's widely known that the lumber market has been highly volatile over the past two years. Starting at the beginning of April 2020, the price of lumber per board foot was sitting at about $260. A little over a year later on May 3, 2021, lumber prices had hit an all-time high at $1,645 per board foot. Unfortunately, that price was unsustainable as demand dried up and the price bottomed out at $475 per board foot by mid-August. Over the next six months, the demand increased coming out of COVID, driving prices to $1,441 per board foot by the Match of this year. As of mid-May 2022, the price has fallen but seems to have stabilized between $800-$1,000 per board foot.
Yes, lumber prices have been playing havoc on the outdoor wood shed segment. Still, there appears to be a very strong demand for softwoods for wood shed manufacturing as the aforementioned lifestyle changes continue to evolve.
What we are likely to see in the next couple of years is wood sheds garnering a bigger share of the overall outdoor shed market with both the metal and plastic shed segments seeing a little bit of a reduction in sales over current levels. Of course, that is assuming that post-COVID lumber prices will continue to stabilize and not return to the high volatility seen between 2020 and 2022.
The Competition Figures to Be Intense
As is the case with other high-growth industries, the competition within the outdoor shed market looks to be very robust over the next six years. Right now, the major players include (in alphabetical order):
- Handy Home Products
- Lifetime Products
- PM Impex Pvt. Ltd.
- Pressmach Infrastructure Private Limited
- and Tuff Shed.
To be fair, there are smaller global concerns that are looking to claim market share.
It's worth mentioning that two major developments took place over the last three years that could affect the balance of power within the industry.
1. In May of 2019, ShelterLogic Group’s ShelterTech brand, in conjunction with Graveyard Carz, successfully built its largest outdoor shed to date. With dimensions of 30 ft. wide, 15 ft. high, and 120 ft. long, it showed the industry as a whole what's possible in terms of shed size. As demand increases, size requirements should follow suit.
2. In April of 2021, UBQ Materials, developer of the most climate-positive thermoplastic material on the market, partnered up with Keter Group to incorporate UBQ's proprietary materials into multiple product lines throughout the marketplace. This was done with the intent of incorporating 55% recycled materials into the manufacturing process for its product line by 2026. This should lead to higher levels of sustainability.
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