SIC 2431

Industry report:

This category covers establishments primarily engaged in manufacturing fabricated wood millwork, including wood millwork covered with materials such as metal and plastics. Planing mills primarily engaged in producing millwork are included in this industry, but planing mills primarily producing standard workings or patterns of lumber are classified in SIC 2421: Sawmills and Planing Mills, General. Establishments primarily engaged in manufacturing wood kitchen cabinets and bathroom vanities for permanent installation are classified in SIC 2434: Wood Kitchen Cabinets.

Industry Snapshot

According to Dun and Bradstreet's 2009 Industry Reports, 10,791 U.S. establishments operated in the millwork industry in the late 2000s. These establishments almost exclusively manufactured products for the construction industry. Ninety percent of the millwork operations were small, employing fewer than 25 workers, although those businesses with more than 25 employees accounted for approximately 70 percent of the industry's $10.8 billion in sales in 2008. Texas was the top state in terms of revenues, with $1.5 billion, followed by California with $931.5 million, Idaho with $814.2 million, Florida with $596.3 million, and Virginia with $564.9 million. Of the 130,817 people employed by the industry, almost 12,100 worked in California. Other states with high percentages of workers in this category were Wisconsin, Minnesota, and Florida.

This industry experienced only modest growth through the mid-2000s despite a strong U.S. economy in the late 1990s, which spurred demand for wood products in residential and light commercial construction, as well as for residential repair, remodeling, and home improvements. To combat the slow growth, manufacturers began to diversify, outsource, and educate customers about the environmental and energy efficiency advantages of their wood products. By the late 2000s, however, millwork, like many sectors of the U.S. manufacturing industry, was feeling the negative effects of a slow economy.

Organization and Structure

Mills in this industry cut down either raw logs or stock lumber to produce wood shapes for windows and door trims, baseboards, railings, window sashes, and other items. Wood pieces are also assembled with glass, vinyl, and aluminum cladding to make window sashes and frames. Often an inert gas such as argon fills the space between the glass panes to enhance insulation. Doors may be constructed of solid pieces for high-end uses or, more commonly, consist of a frame, two panels, and filling. In addition, exterior doors and interior apartment entrance doors often use steel to enhance security. In the 1990s, there was a shift away from expensive stain grade millwork to less expensive paint-grade, along with an increased use of medium density fiberboard (MDF).

Over time, the industry's dependence on new construction and repair decreased, and the focus turned to remodeling, maintenance, and home improvements. New construction subsides and repair work increases during economic downturns. Repair work held steady during the recession in the early 1990s, and new construction grew quickly in the mid-2000s before slowing down late in the decade.

According to the U.S. Department of Commerce, the primary products manufactured by the millwork industry are doors, wooden windows and sashes, and moldings. Doors and windows in particular are increasingly clad with vinyl, aluminum, or other metals, and energy savings led to the development of vinyl and aluminum windows. However, wood windows were regaining popularity in the mid- to late 2000s because of their strength, beauty, and natural insulating properties. Industry developments allowed aluminum and vinyl clad wood windows to be produced in unlimited shapes and sizes. Conversely, solid wood doors lost market share to nonsolid wood doors, steel, and steel-covered exterior doors.

Continued environmental legislation put the industry under tremendous supply pressures, although the effect on employment was minimal compared to the logging, sawmill, and plywood industries. Nevertheless, pressure was shifting the direction of technological change and marketing techniques in the industry. Most establishments specialized in one product class, such as wooden door units, stairs, or railings. Although the industry was previously concentrated primarily in the Pacific Northwest, the Midwest, and Texas, some establishments had moved to the Southeast due to the second-growth forests in that region and new wood suppliers from South America. Imports of both raw materials and milled products increased dramatically during the early years of the twenty-first century.

Background and Development

The millwork industry was impacted by a variety of environmental issues in the 2000s. Logging restrictions on federal land based on the concern for the future of the spotted owl and other species and a general desire to leave remaining forestland untouched was a major factor in the growth and direction of the wood products industries. Boycotts and export restrictions on tropical wood affected import and export markets. Concern over the effects of volatile chemicals on the health of workers and consumers resulted in advances in wood treatment. Energy loss concerns led to major innovations in window and door production in the late twentieth and early twenty-first century.

Logging restrictions were a source of particular concern to the industry because they directly influenced the price and availability of primary production materials for millwork establishment. To protect the spotted owl in 1989, environmental groups invoked the Endangered Species Act of 1973 to halt logging in many forests in the Pacific Northwest. In 1993, the ban was extended to parts of California to protect the California spotted owl, which was listed as a sensitive but not endangered species. The move sparked debate about trading jobs for the environment. The effect of the logging restrictions on jobs was undeniable devastating to the northwestern logging and wood products industries. However, with timber harvests from national forests reduced, 75 percent of forest products companies reported healthier markets and improved pricing. Imports also dramatically increased, with the U.S. International Trade Commission estimating an 80 percent increase in imports of millwork products in the late 1990s.

In 1993, President Clinton held a timber conference in an attempt to find common ground and compromise between environmentalists and forest product workers. The compromise plan allowed 1.2 billion board feet a year to be cut from federal forests. This was approximately one-fourth of the amount permitted in the 1980s. The proposal also established spotted owl reserves and water system buffer zones to protect the owl from extinction and streams from erosion. The president also proposed the development of 10 intermediary zones. Loggers were allowed to experiment with new harvesting techniques in these zones, but forest management and environmental effects continued to be monitored. In a continued effort to protect the forests, President Clinton proposed making 40 million acres of federal forest off limits to the timber and mining industries. While environmentalists applauded this proposal, industry spokesperson Chris Nance, the vice-president of public affairs for the California Forestry Association, stated in an article in the San Francisco Chronicle that the U.S demand for wood was expected to increase 50 percent over the next 20 years, and that the proposal would only encourage increased imports from countries with little or no environmental laws. The debate over use of public land and protection of environmentally threatened species remained a contentious issue in the industry into the late 2000s.

Wood Technology magazine noted in 1999 that millwork plants sought alternatives to western pine and Douglas fir, which are in short supply, including radiata pine imported from Chile and New Zealand, southern yellow pine, white pine, and hardwoods. Both radiata pine and southern yellow pine were used extensively in the industry in the early twenty-first century. These alternatives required mills to be flexible in their handling of woods. Each species requires its own methods of treatment, drying, and handling of imperfections not only because of the unique characteristics of each kind of wood, but also because of the harvesting and storage practices of distant vendors, both in the United States and abroad. "Good," or certified, wood started to make a name for itself in the industry in the mid-2000s. Forest owners were certified by an independent source as having sustained their forest with no practices harmful to the long-term health of the forest, and no clear-cutting.

A decline in new residential construction in the early 2000s had a negative impact on the millwork industry. About mid-decade, however, the slump reversed for a period of time, before the United States entered an economic recession. According to Wood & Wood Products, the National Association of Home Builders reported that 2005 marked a record year for new housing, with 2.073 million housing starts in the United States. This figure had a direct impact on sales of wood doors, windows, and such millwork as flooring stairwork, moldings, and ornamental woodwork.

A study conducted by the Freedonia Group, Inc. published in Wood & Wood Products reported that the largest share of the U.S. window and door market was vinyl, with wood products second. In 2005, 17.4 million vinyl windows were shipped for new construction and 23.2 million for remodeling and replacement, compared to 9.5 million and 10 million, respectively, for wooden windows.

Manufacturers of wooden windows and doors increasingly diversified into vinyl, aluminum, and fiberglass products in order to offer a larger portfolio of products to customers. Andersen Corp., one of the largest manufacturers of wood windows and doors in the United States, expanded into the vinyl market in 2006.

Capitalizing on trends in consumerism was critical to bolster sales of wood windows and doors. High energy costs increasingly compel customers to purchase replacement windows. Wood & Wood Products reported that vinyl had an even stronger hold on the remodeling and replacement market than the new construction market. Vinyl was the clear choice for remodeling and replacement windows in the mid-2000s. Manufacturers of wooden products aimed to increase their share by educating consumers about wood's insulation properties. Wood is a natural insulator that, when combined with energy-efficient glass, is more capable of conserving energy and reducing heating bills than vinyl or aluminum.

Current Conditions

The construction industry--both new construction and remodeling--continued to be the driving force behind growth in the millwork industry in the late 2000s. According to a May 2008 Business Wire article, "this industry is poised to benefit from a recovering construction industry which looks set to return towards more cyclical growth. Pent up demand from first home buyers and more favorable economic conditions are expected to breathe life into the industry."

A report by Supplier Relations U.S. LLC showed that U.S. demand for wood windows and doors totaled $15.0 billion in 2008. This sector of the millwork industry had $14.5 billion in revenues, with imports from 74 countries valued at $800 million. Exports grew at an average rate of 18 percent from 2006 to 2008, and the value of products shipped to 109 countries in 2008 was $266.5 million.

Unlike its competitors, wood is a renewable resource, a fact that is important to environmentally conscious consumers. Customization was another significant trend. Consumers could match their doors and windows to their floors or cabinetry by choosing from a variety of woods. They could also opt for vinyl-clad wooden windows, combining the insulation capability of wood with the maintenance and design appeal of vinyl.

Industry Leaders

Privately owned Andersen Corp., based in Bayport, Minnesota, was a leading wood window and door manufacturer in the late 2000s. It manufactured wood-clad windows and patio doors, as well as storm and screen doors, and posted revenues of $3 billion in 2007 with 13,000 employees. In July 2006, Andersen expanded into the vinyl business with the acquisition of Silver Line Building Products, a New Jersey-based maker of vinyl windows and doors.

Pella Corporation, headquartered in Pella, Iowa, was another industry leader, with sales of $1.5 billion and 9,800 employees in 2007. Marvin Windows & Doors, of New Albany, Indiana, specialized in high-value custom production for replacement windows and doors and for unusual architectural arrangements on new construction. Sales for Marvin in 2008 were $5.9 million.

Other leading companies in the millwork industry included JELD-WEN Inc., of Klamath Falls, Oregon, with annual sales of $3.1 billion; Clopay Corp. of Mason, Ohio, a subsidiary of Griffon Corp.; and Huttig Building Products Inc., of St. Louis, Missouri, with 2008 sales of $671 million.


Safety Issues.
According to the U.S. Department of Commerce, the millwork industry has an accident rate that is 49 percent higher than that of the general manufacturing industry. The accident rate for millwork was also higher compared to related industries of wood kitchen cabinets, hardwood veneer and plywood, softwood veneer, and plywood, but lower than industries categorized in SIC 2439: Structural Wood Members, Not Elsewhere Classified. The rate of injuries sustained per 100 full-time workers was greater in large mills (defined as 20 or more workers) than in small mills.
The Labor Department's Bureau of Labor Statistics lists back strain and hand and finger injuries as the two most common types of injuries in the millwork industry. Back strain injuries were primarily the result of lifting heavy objects. Serious hand and finger injuries typically occurred while operating stationary saws and other machinery. Other safety issues that received attention included respiratory effects on workers involved in both sanding and the application of volatile materials such as polyurethane and formaldehyde. The U.S. Department of Labor believed that many accidents were preventable through education, training, and minor machinery enhancements.

In 2005 the U.S. Bureau of the Census reported that more than 158,000 people were employed in the millwork industry. According to Dun and Bradstreet, that figure had dropped to 130,817 by 2008. The U.S. Department of Labor reported that despite the large number and variety of machines used in the industry, it is quite labor intensive. For each dollar of value that mills add to raw materials, they have 72 percent more production-worker hours than the manufacturing industry as a whole. According to Brad Knickerbocker in the Christian Science Monitor, technical innovation enabled the timber industry to record gains of up to 40 percent in productivity. This created a corresponding decline in timber industry employment. Technological innovation shifted toward the maximization of materials savings rather than labor savings, especially with the shortages of raw materials.

The millwork industry was moving increasingly toward the use of computers in both design and manufacturing processes. Although the employment outlook for woodworkers was projected to grow more slowly than average through 2016, skilled woodworkers with computer expertise were expected demand according to the Occupational Outlook Handbook. According to the U.S. Department of Commerce, employment opportunities in the millwork industry were available in all regions of the country, with the vast majority of establishments employing fewer than 100 people.

Research and Technology

Concerns about energy costs, maintenance requirements, and personal security led to significant technological changes during the 1990s and 2000s. Environmental concerns regarding materials was a particularly vital issue in the late 2000s. Some manufacturers responded to the "going green"trend by offering more products made of certified wood. For example, in 2008 JELD-WEN launched a line of custom wood windows and patio doors certified by the Sustainable Forestry Initiative (SFI). According to Business Wire, the SFI was one of the largest independent, nonprofit sustainable forestry certification programs in the world. JELD-WEN's SFI wood products were also treated using a water-based solution that was free of volatile organic compounds (VOCs). VOCs, such as formaldehyde, are present in traditional "dipping" wood protection treatments and have been cited as having various negative health effects.

For both doors and window frames, technological advances were in the area of materials conservation. Sustained high costs for woods such as Douglas fir, Ponderosa, and other western pines spurred innovation in window frame and door production, including the increased use of radiata pine and regionalized species like southern yellow pine, an increase in painted products rather than stain-grade products, and an increased use of medium-density fiberboard rather than solid wood. Composite materials were increasingly used as substitutes for solid wood parts, and window frames were produced from such engineered woods. As the industry continued to substitute engineered woods, such as laminated strand lumber for sawed wood, it is expected to focus its technological advances on worker safety issues such as exposure to dust, formaldehyde, and other volatile organic compounds. The increased use of technology was also expected to play an important role in product design and manufacturing.

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