Publication Number: 4032

Report Title: Wood Flooring and Hardwood Plywood: Competitive Conditions Affecting the U.S. Industries

Investigation Number: 332-487

Author's name(s): Fred Forstall, David Ingersoll, Gail Burns, Vincent DeSapio, Cindy Foreso, Vincent Honnold, Cathy Jabara, Alan Treat, Jeremy Wise

Date Published: August 2008

Report Description/Introductory Text: Although U.S. production, consumption, and trade of wood flooring and hardwood plywood increased significantly during the 2002–07 period, the domestic industries faced increasing competition from imports. In the midst of growing markets for both wood flooring and hardwood plywood, U.S. wood flooring producers generally increased shipments, capacity, and exports more than U.S. hardwood plywood producers. During the period, the value of U.S. imports doubled, and their share of the U.S. markets increased from one-third to nearly one-half in 2007. Factors contributing to the rise in imports included shifting U.S. market preferences and reportedly, the increased market power of wholesale distributors and large retailers whose greater logistical capabilities make them more able to source imported products. In addition, higher input costs in the United States, mainly for raw material and labor, put upward pressure on U.S. product prices at the same time that lower input costs, mainly for labor, in competitor supplier countries (other than Canada) put downward pressure on finished product prices and contributed to the rise in the import share of the U.S. market. Although there are a number of significant foreign suppliers, during the 2002-07 period China became the largest supplier of wood flooring and hardwood plywood and the most significant competitor to the U.S. industry in the U.S. markets for hardwood plywood and engineered wood flooring. Chinese producers took advantage of domestic plantation wood resources and relatively low wage rates to achieve low overall production costs, and as its currency was effectively pegged to the U.S. dollar for most of the period, China was able to increase exports to the United States and to increase its market share, partly at the expense of other foreign suppliers.

Topics Covered: solid wood flooring, engineered wood flooring, hardwood plywood, illegal logging

Countries: Brazil, Canada, Chile, Indonesia, Malaysia, Russia, United States

HTS Numbers: 4409, 4412, 4418

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