2022 Building Industry Predictions

If 2020 was the year of uncertainty, then 2021 was a year spent adjusting to new norms. What kind of year will 2022 be? We checked in with LP Building Solutions executives to reflect on the past year and to get their predictions for the year to come.

What were LP's biggest wins for Building a Better World^™ in 2021?

Brad Southern, Chair & Chief Executive Officer: A big part of our purpose, Building a Better World^™, is doing well so that our employees and shareholders can do good. So far in 2021, our stock price is up almost 80 %. That builds a better world by building long-term economic vitality for our employees and investors. In more tangible ways, this year the LP Foundation donated over 500 000 $ to deserving nonprofits in the communities where we operate. We provided over 60 000 $ in disaster relief and humanitarian aid following devastating floods near our headquarters in Nashville, Tennessee and when tornadoes ripped through Clarke County, Alabama, near one of our OSB facilities. We planted over 4 million trees in Canada. More than 50 children of LP employees received an LP Scholarship for the 2021–22 academic year. Employees volunteered their time to build homes with Habitat for Humanity, taught high school students about sustainable forestry, and collected school supplies for teachers. The list goes on and on!

Mike Sims, Senior Vice President of Corporate Marketing and Business Development: I would have to say the way that LP was able to pivot as an organization, despite all the continued challenges presented with stay-at-home directives and supply chain disruption from the pandemic, to continue to deliver solutions to build better homes—homes where people can live a better life through the new challenges presented by a pandemic. Our business transformation proves our commitment to providing proven solutions engineered to help builders face a broad spectrum of the industry's obstacles head on. LP has stepped up at the most challenging time in our history, at a time when the world needed what we do the most in 2021!

In your opinion, what were the most pivotal points in 2021?

Southern: LP's stock price closed above 50 $ a share for the first time on March 10, 2021. In July and August 2021, OSB prices fell from record highs to below 400 $ a drop of almost 1 000 $ yet LP's shares never closed below 50 $. This is pivotal because it shows that the market values LP as more than a proxy for commodity prices. That is not something we could have said before our transformation from a commodity company to a specialty solutions company. In addition to business performance, we released the LP Diversity, Equity and Inclusion Pledge for Action in 2021, which is very important to me personally and to our company. The pledge prioritizes gender and racial diversity, equity and inclusion as critical focus areas for the company. Our goal is to cultivate an inclusive work environment that attracts and retains a diverse and high-performing workforce to enable LP to best serve the needs of our rapidly diversifying markets and communities. 

>What are the lasting ways in which COVID-19 has impacted the supply chain?

Neil Sherman, Executive Vice President, Siding: The short-term supply chain challenges have been very disruptive across the industry. As a result of these disruptions companies, including LP, are modifying their strategies to mitigate the impacts of these challenges. These strategies include better collaboration with suppliers and their suppliers, technology, alternate supply agreements, better forecasting, flexibility in transportation suppliers, etc.

What trends or market forces have the greatest potential to disrupt the industry in the coming year? 

Craig Miles, Director National Sales and Marketing, OSB/EWP: Labor will continue to be a challenge for the industry for the coming year. Over 23 % of the construction workforce is 55+ and less than 13 % is younger than 25. We need to continue to innovate to reduce the need for labor to build great homes.

Jeff Yelle, Director, OSB/EWP Technology: We're all becoming more accustomed to the uncertainty that a global pandemic can cause, and we're frequently reminded of the challenges that can result in supply chain and logistics. I think that agility will be a key success factor for our industry as we learn to pivot effectively when faced with new market challenges. 

Trinh Le, Director of Business Development and Strategic Marketing: There is definitely a shift toward a digital landscape that I think will only continue to sharpen. Just about every stakeholder, whether it be customers, suppliers or builders, is pivoting the way that they do business and communicate. 

How does Entekra fit into LP's strategy?

Sherman: Founded in 2017 with a mission to change how America builds, Entekra has pioneered many industry-first innovations with its unique integration of software, engineering, technology and modern construction methods. Recognizing Entekra's potential early on, LP invested in the company alongside its senior management team. Like most disruptive startups, Entekra has focused on the paramount challenge of market adoption. With its impressive technology and rapidly growing customer base, Entekra has built a strong foundation and proven the efficacy and benefits of off-site construction. I'm pleased to now lead Entekra as part of LP's commitment to growing this piece of our business even further.  

What are the major trends or contributions you are watching in green building/sustainability?

Yelle: We'll be keeping an eye on the continued evolution of energy codes and new energy-efficient technologies and plan to continue taking an active role in shaping code and regulatory updates. Our products by their very nature are green and sustainable, and I am proud to be a part of an industry that produces products that store carbon instead of emitting it.  

Sims: An increasing number of stakeholders are interested in corporations' carbon footprints, and fortunately we already have a great story as a company. For us it is mostly about telling our story because society is holding corporate America accountable, and we have been and will continue to deliver.

Sherman: Wood is a great renewable resource, but it has been coded out of many building jurisdictions. I am glad that LP is playing our part to educate architects, engineers and code-writing organizations about the sustainability benefits of wood over steel or concrete.

Miles: What I am watching is the impact that weather events will have on building codes. We are seeing local municipalities raise the standard to balance the resiliency threats they are facing, and I would expect more of that as we look forward.

How will the diversity of homeowners impact the siding business moving forward?

Le: There is a need to market to homeowners in the ways they wish to be marketed to, whether that is communicating to them in their preferred language, in their preferred media channels, or with content that resonates best with them.

What excites you the most about the coming year for LP?

Sherman: We have great strategies, products, solutions and teammates to take advantage of the positive momentum in our industry.

Sims: I am excited about how prepared LP is to transform our business in a meaningful way through the innovation that we have launched. We also have a strong pipeline of exciting innovation and solutions to be introduced this coming year. Our Siding and Structural Solutions businesses, as well as Entekra, are providing the right solutions and the ones that builders and contractors are most interested in. All of our recent solutions, including LP ExpertFinish, LP WeatherLogic along with Entekra, provide extreme durability and meaningful labor savings.

Southern: LP is a leader in building solutions and, in particular, our siding solutions business has seen amazing growth over the last few years. We expect this trend to continue as our employees advance LP's strategy and continue to Think and Act Like Owners^™—a key leadership principle at LP. 

What excites you the most about the coming year for this industry?

Southern: The housing and repair and remodel markets have the potential to go from being one of the lone bright spots in a dismal COVID-19 economy to leading a broader recovery as the pandemic's grip finally weakens. This is an industry that's truly making a positive impact in the world. 

Sims: I am excited that people are looking to our industry to provide the right environment for the new “hybrid work model.” With people now working more from home, they are looking for the right solutions to the challenges that come from more time spent at home, such as how to combine the right work and personal space.

Yelle: Housing remains strong, and LP is well-positioned to support continued growth with a wide range of innovative building solutions. We continue to invest in our business to support this growth and are working to bring several new solutions to market in the coming year.

Final Thoughts

2021 has certainly been a year full of challenges and growth. We are proud of the steps taken in 2021 to elevate our brand purpose and look forward to the opportunities and challenges of 2022.