Experts predict growth despite soft market concerns

Not far from Mexico City are the ruins of the mysterious ancient city complex known by its Aztec name: Teotihuacan, or “The Place of the Gods.” In the last few years, archaeologists working at the site stumbled upon underground rooms with unusual ceilings that are insulated by a layer of mica inserted between two layers of stone. Similarly, excavations of a series of interconnected subterranean chambers revealed that some of the floors were covered with layers of thick mica sheets.

While archaeologists are unsure as to what the chambers were used for, one thing that is obvious is that the ancient Aztecs went to great length to insulate the rooms, as mica has special properties that make it resistant to water and electrical currents. It is highly elastic, heat-resistant up to 1470° F, and resistant to both sudden temperature changes and organic acids. Because of these properties, mica has been used in modern times as an insulator in various chemical processes and electrical and electronic applications, and in nuclear and space technologies.

Thankfully, LBM dealers have an array of insulation and building envelope products more advanced and easier to install (and easier to come by) than mica—a good thing considering the size of the market. Just the U.S. insulation market alone is expected to grow to be worth between $15.22 billion and $19.96 billion by 2028 or 2033, depending on the source. Similarly, the housewrap market is projected by some sources to reach $7.7 billion by 2030. The trick for LBM dealers, say industry experts, is to effectively tap into that market through smart positioning of products during somewhat questionable economic conditions.

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Soft market, cautious growth

Huber’s ZIP System Rainscreen is engineered to help meet new code-required 3/16" air gap requirements in stucco and adhered stone assemblies. It consists of a rigid drainage mat covered by a heavy-duty fabric that can be used as a secondary water-resistive layer required for “absorptive” or “reservoir” cladding assemblies.
Huber’s ZIP System Rainscreen is engineered to help meet new code-required 3/16″ air gap requirements in stucco and adhered stone assemblies. It consists of a rigid drainage mat covered by a heavy-duty fabric that can be used as a secondary water-resistive layer required for “absorptive” or “reservoir” cladding assemblies.

Despite economic uncertainties and a housing market that remains unstable, there’s reason to believe the market for building envelope products may experience positive growth throughout the coming 12 months. “We anticipate sheathing and barriers continuing to grow within the building envelope,” says Casey Smyth, senior corporate brand manager for LP Building Solutions. “Homeowners want durable, long-lasting products on their homes that can withstand environmental elements, and builders want products that are easy to install.”

Xuaco Pascual, director of construction and building science for Tamlyn, also sees the growth of the building envelope segment to outpace the soft housing market well into 2025. “Many of our new clients are looking to work with agile companies versus having to deal with the red tape and challenges they face when dealing with larger corporations,” he explains. “At Tamlyn, we continue to see market headwinds that are largely offset by gaining new customers. Moisture issues are a focal point for builders and designers because they remain the largest cost associated with callbacks and the leading cause for building deterioration. The building envelope is a consultative segment and more builders and contractors are switching to companies that are easy to deal with, are able to provide that consultation service and offer a good balance of performance versus cost.”

Some of the factors, industry expert say, that are contributing to this growth is the continued demand for better energy efficiency, a demand that is causing the development of new codes. Says Terry Secrest, executive vice president of manufacturing and product sales for RoyOMartin, “We see the building envelope continuing to evolve with the changing energy and building codes. We believe those codes will require a combination of existing products and new ones.”

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Todd Gluski, director of marketing for OX Engineered Products, also sees energy efficiency as a driving growth factor. “From what we have seen, we expect the building envelope segment to see moderate growth by 2025, with a projected increase in market size driven by factors such as a rising focus on energy efficiency, sustainable construction practices, and growing demand for improved building comfort,” he predicts with some caution. “However, the pace of growth might slow down due to potential economic challenges and a softening construction market.”

“Factors that will lead to growth in 2025 include stricter energy codes and increased awareness of energy costs, which will drive demand for high-performance building envelopes,” Gluski points out. “Growing emphasis on green building practices will encourage the adoption of sustainable building envelope materials. As these trends continue, we will experience growth in the coming year. In addition, a substantial lack of housing inventory has left a large segment waiting on the sidelines fueling an unmet demand that could contribute to growth even more in the coming years.”

Even with that caution, however, optimism seems to prevail. “Overall, we see the industry remaining strong throughout 2025, especially in commercial construction as the housing market continues to wait for interest rates to drop,” says Tom Robertson, business unit manager, wall insulation for Atlas Roofing. “Specifically in our category of insulation, we see the codes continuing to strengthen in our direction, adding momentum to our progress and wind to our sails.”

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Growing product trends

MFM SubSeal is a 25-, 40-, or 60-mil-thick self-adhering sheet-type waterproofing membrane composed of a multi-layer high-strength polymer film that is coated with a layer of specially formulated rubberized asphalt adhesive. According to MFM, SubSeal is suitable for use under siding, exterior plaster, as a through wall flashing, or in sub-grade applications where the membrane is protected from long-term ultraviolet exposure.
MFM SubSeal is a 25-, 40-, or 60-mil-thick self-adhering sheet-type waterproofing membrane composed of a multi-layer high-strength polymer film that is coated with a layer of specially formulated rubberized asphalt adhesive. According to MFM, SubSeal is suitable for use under siding, exterior plaster, as a through wall flashing, or in sub-grade applications where the membrane is protected from long-term ultraviolet exposure.

When it comes to this anticipated growth, product experts point to specific trends that are driving the upswing. For example, LP Building Solutions’ Smyth points to innovative and sustainable building products, especially those with increased performance, as being on the rise. “These are also two pillars that LP uses to guide our product development, so we can ensure we are providing sustainable products without sacrificing durability and high-performance,” Smyth says.

For self-adhered flashing products, building envelope experts are seeing a move away from asphalt formulations to butyl and acrylic options. “Much of this is driven by better performance for butyl and acrylic adhesives over a broad range of application conditions,” explains Tamlyn’s Pascual. Contractors are realizing that it is more cost effective to do it once than have to repair and replace material constantly in challenging conditions. And for water resistant barriers (WRBs), the trend towards using drainable WRBs as a standard continues to expand. The use of self-adhered membrane options are growing with new product introductions. Self-adhered WRBs remain a small but growing segment of the industry with regional preferences for use.”

High performing water mitigation products are at the forefront of trends, and awareness of rain screen systems is growing, Pascual points out. “This is evident in specifications that call for them and the growing use of them in expanded regions of the country. Designers are looking for ways to minimize moisture intrusion risks. Rain-screen systems offer a means for better water management behind the cladding, better drying and pressure equalization that dramatically reduces driving forces for moisture intrusion. Contractors are finding that the installation of products in roll form is easy and more cost effective vs. metal or wood furring.”

This isn’t to say that water is the only thing on the minds of building envelope product manufacturers says OX Engineered Products’ Gluski. “Several emerging building product trends include an increased use of sustainable and recycled materials, 3D printed construction materials, advanced engineered timber, transparent solar panels, smart materials integrating technology, and prefabricated modular building components; all with a focus on environmental sustainability, energy efficiency, and innovative design capabilities.”

Challenges to overcome

According to LP Building Solutions, its WeatherLogic water-resistive sheathing installs like regular sheathing, delivering potential labor savings while keeping jobsites cleaner and more professional. It can be used for both roof and wall applications, is available in 4-foot nominal widths and 8-, 9-, or 10-foot lengths, and comes with a 30-year limited warranty.
According to LP Building Solutions, its WeatherLogic water-resistive sheathing installs like regular sheathing, delivering potential labor savings while keeping jobsites cleaner and more professional. It can be used for both roof and wall applications, is available in 4-foot nominal widths and 8-, 9-, or 10-foot lengths, and comes with a 30-year limited warranty.

While these trends drive product growth, challenges exist for LBM dealers that can dampen growth potential. For example, the lingering impact of labor shortages are a challenge contractors continue to face, and LBM dealers need to be able to provide potential labor saving solutions. “With the skilled labor shortage continuing, anything focused on labor savings and/or accomplishing multiple functions within a single product or material is going to be a winner,” Atlas Roofing’s Robertson points out. “It’s all about multipurpose, multi-function products that focus on saving labor hours. Right now, we’re seeing not enough labor in the field, so adding time savings to the process is the goal.”

Tamlyn’s Pascual agrees. “Poorly trained labor remains a challenge for our industry. We find that labor is now available but turnover and lack of training is problematic which leads to quality issues on-site. Companies like Tamlyn offer jobsite visits to review installations and train crews as necessary. This is an essential component for executing properly in the field.”

An additional challenge is the constantly changing face of codes, especially in light of newly developed products, that can leave LBM dealers scratching their heads as to what products to stock. “With code changes, there are many new products that are being offered, we always recommend fully vetting the products before accepting their promises at face value,” RoyOMartin’s Secrest states.

These code changes can be confusing to the contractor, and code departments are often not up to date on the building envelope impacts, Tamlyn’s Pascual explains. “One such change is the requirements for Water Resistant Barriers (WRBs) behind stucco and stone cladding systems which now require a combination of 60 min rated barriers, drainable rated barriers or the use of a 3/16″ rain-screen system for most of the country,” he says. “Tamlyn can help contractors address these changes before a project is flagged. We have gained several new projects where the code official stopped a project for non-compliance and reached out to Tamlyn for an alternative fix.”

This year, Tamlyn launched TamlynWrap Elite, a new WRB specifically targeted at the residential market. According to the manufacturer, the product offers a cost effective alternative for the residential market.
This year, Tamlyn launched TamlynWrap Elite, a new WRB specifically targeted at the residential market. According to the manufacturer, the product offers a cost effective alternative for the residential market.

Code changes and updates can be challenging to implement at the local levels. It often comes down to a balancing act of performance versus costs, Pascual says. “High interest rates have made projects less attractive to build or challenging to sell. This has driven an interesting contrast between builders who want to differentiate on quality and performance to justify price versus a first-cost mindset for others who sacrifice quality over price. At Tamlyn, we work hard to justify the value of our products and focus on designers and contractors who look to differentiate on quality and performance. When these challenges subside, historically they will be better positioned for differentiation, growth and capture of market share.

Still, costs can be a domino effect for any LBM dealer’s customers, Atlas Roofing’s Robertson explains. “When the stringency of the building code in the area of insulation is increased, you are potentially increasing the cost of the entire assembly. It’s more important than ever to choose your insulation technology wisely, to work to gain efficiencies throughout the entire assembly. When the R-value requirement goes up, the insulation gets thicker. When the insulation gets thicker, it no longer fits into the cavity, the cavity size must be increased, the framing size must be increased, etc. The solution to this challenge: adjust the insulation technology. The same R-value needed, thinner continuous insulation product.”

To sell more, know more

In the midst of these opportunities and challenges, the burning question for LBM dealers is how to take advantage of the market conditions to sell more building envelope products. According to industry experts, one of the soundest strategies is to offer an integrated package of products that are part of a full system.

According to RoyOMartin, its Eclipse OSB Radiant Barrier Panels are a cost-effective and energy-efficient roof sheathing solution, reducing attic temperatures in the summer by as much as 30°F. All RoyOMartin products are available Forest Stewardship Council (FSC) certified.
According to RoyOMartin, its Eclipse OSB Radiant Barrier Panels are a cost-effective and energy-efficient roof sheathing solution, reducing attic temperatures in the summer by as much as 30°F. All RoyOMartin products are available Forest Stewardship Council (FSC) certified.

“Dealers would do themselves a great service by carrying and promoting full systems of branded products,” says Tamlyn’s Pascual. “Too many dealers carry a mix and match list of products that may or may not be compatible with each other. Just because a product meets code requirements, does not mean they are compatible between manufacturers. Quality manufacturers offer system warranties because they ensure products are compatible with each other. Dealers can insulate themselves from these issues by selling and promoting a system approach to solutions.”

As an example, in the case of LP Building Solutions, it emphasizes sustainability throughout its product lineup and has eight Environmental Product Declarations (EPDs) representing all of its Structural Solutions products along with its entire LP SmartSide trim and siding portfolio. “We continue to see greater climate threats, the need υ
for resilient materials that can help the structure stand up to the proverbial (and literal) storm is important for homeowners,” says LP Building Solutions’ Smyth. “Structural Solutions products have a lasting nature which helps with the homeowner’s priorities of strength and resiliency.”

It’s become more important than ever for LBM dealers to fully understand the products they carry and how they can work together, says OX Engineered Products’ Gluski. “Citing some of the previously mentioned building trends around energy efficiency, it’s important that your dealer network has access to products that will help customers meet these goals. It’s important that you are set up as a one-stop store for obtaining the products needed to achieve changing building practices. It is also extremely important to understand how these products work and have the ability to serve as a knowledgeable source for your customers. Offering customer training on how to meet changing codes and regulations is an excellent way to engage with customers and teach them what products can help them meet today’s standards.”

OX-IS from OX Engineered Products is a structural insulated sheathing panel with built-in air and water barriers. Engineered to meet or exceed ever more stringent residential building and energy code requirements, the manufacturer claims OX-IS is the industry’s tightest air barrier for lower air infiltration, with air exchange per hour performance that’s a reported 15-20% better than standard OSB with housewrap.
OX-IS from OX Engineered Products is a structural insulated sheathing panel with built-in air and water barriers. Engineered to meet or exceed ever more stringent residential building and energy code requirements, the manufacturer claims OX-IS is the industry’s tightest air barrier for lower air infiltration, with air exchange per hour performance that’s a reported 15-20% better than standard OSB with housewrap.

Atlas Roofing’s Robertson agrees with the need for product knowledge. “It’s important for the LBM dealers to have a deeper understanding of the products they sell and how they can be used and installed. This falls on us as manufacturers: how can we best get LBM dealer staff in front of our sales reps for quick learning sessions? How can we work with them to provide a higher level of information, so we become consultants to them, in a way?”

Being more consultative is key when it comes to an LBM dealer differentiating itself from the competition, experts point out. “At Atlas, we’re working with our LBM dealers closely, asking them to lean on us and take advantage of our ability to train and consult on the products we offer,” adds Robertson. “Another benefit to this level of learning: once LBM dealer sales staff members learn more about products, they can learn the industry pairings, what products work well together, what products can be sold together, etc.”

Says Tamlyn’s Pascual, “Small and medium-sized dealers can differentiate themselves by offering solutions to their customers. Our most successful dealers are less transactional and more consultative when it comes to the building envelope. In the absence of knowledge for value, the default position is almost always a tradeoff for price and volume.”

With rising energy costs and a residential home market that shows signs of a potential rebound, LBM dealers need to be ready to meet the building envelope product demand of their customers. But unlike the fragility of mica, the building envelope market should stay strong for LBM dealers provided they avail themselves of available resources to buoy up their potential success. As Tamlyn’s Pascual puts it, “I would encourage dealers to leverage their manufacturing partners to set up regional training sessions for their staff. This would help their sales staff position their product lines more effectively at the local level.”

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