If you are curious about the future of stucco, look no further than the SMA’s 2019 Market Report.
Established in 1957, the Stucco Manufacturer’s Association (SMA) is dedicated to the research, standards, education, training, and promotion of the stucco trades across North America. In 2016, the SMA published its first groundbreaking market report using US census data, other reports, and interviews to analyze trends. This past June, the group released its second high-anticipated report.
As members and supporters of the SMA, we look forward to these reports, to help us understand market trends and statistics which will help us better serve the stucco trades. Here’s a brief overview, as well as some key takeaways.
Stucco Trends by Region
Low cost, great properties, and less maintenance cost all add positively to the growth of the US Stucco Market. Not surprising, stucco is still strongest where the trade originated. And it’s in these same areas that stucco shows the greatest potential growth—California, Arizona, Nevada, Texas, the Sunbelt from Louisiana to the Carolinas, and Florida, as well as in numerous pockets as far north as Minnesota, Ohio, Pennsylvania and the plains of Canada.
That said, three of the four tracked markets saw stucco lose market share in 2018. It was the West that saw an increase. More amazing was that this market segment grew by at the expense of the fiber cement siding market. The stucco industry could use this as a model on how to win back market share in other areas.
Northeast: Never a major market for stucco, today less than 1,000 homes, out of 59,000 have stucco. Leaks, lack of oversight and poor workmanship led to news stories of stucco litigation which resulted in a loss of consumer confidence. Adhered masonry veneer was added to the lawsuits. The solution of costly upgrades or consulting fees put stucco at a price point well above fiber cement siding. Fiber Cement Siding gained market share whereas brick and stucco lost.
Midwest: Minnesota had a decent stucco market and the regional plaster bureau was able to help get stucco up to a 2% market share. Unfortunately, this bureau lost its funding and as a result, the stucco market share dropped to less than 1,000 homes per year. Fiber Cement Siding made only modest gains. Wood siding was the major cladding winner with a 5% gain in market share. This is the only market wood siding made gains.
South: 434,000 new homes had 93,000 clad with stucco (21%). Texas has remained steady with a healthy stucco market share. Losses were primarily in Florida and South Carolina where flashing failures, rock bottom pricing, and lack of skills training, led to leaks and quality issues. This market will need a strategic plan to regain public trust. Fiber Cement Siding, vinyl siding, and brick all made gains.
West: 99,000 out of 180,000 were clad with stucco (55%). Stucco gained 3% and Fiber Cement Siding lost 2% market share. Blending favorable cost and consumer confidence, stucco has assured itself strong market share for the foreseeable future in the west, thanks in part to determined efforts by the SMA.
Key Takeaways from the Stucco Market Report
Insulated Stucco is a rapidly growing market due to increased building envelope and energy code efficiencies. Experts estimate that insulated sidings overall increase market share by 5.8% or greater by 2026. This includes insulated three-coat and the proprietary one-coat stucco systems. It is predicted over the next decade, 2/3 of stucco used in the U.S. will be an insulated system. Due to verifiable code compliance, one-coat stucco will make up a significant portion of the future stucco market.
Increased market size. Globally, the stucco siding market is predicted to reach a valuation of $15.6 billion by 2026, a slow-but-steady 4.9% Compounded Annual Growth Rate (CAGR). By comparison, the U.S. hard coat stucco market is anticipated to reach $4.15 billion by 2026, a sluggish rate compared to that of the insulated stucco market.
Analysts believe that changing consumption patterns are expected to have a great influence on the overall market. Stucco dwellings in the Sunbelt may be associated with sun and sand, but their distinctive exteriors have resulted from the available raw materials and the expertise of the resident workers. The concentration of stucco structures has also, in turn, perpetuated their acceptance and demand. The future for stucco—whether conventional, modified or as a component in exterior insulation systems— looks bright.
Established stucco areas are among the fastest-growing relocation areas. New technologies have increased product performance. And states now with energy building codes have literally opened the doors to exterior insulation systems and increased use of stucco.