MATERIAL SUBSTITUTION IN THE U.S. RESIDENTIAL CONSTRUCTION INDUSTRY, 1994 VERSUS 1998

The US residential construction industry has undergone a period of rapid change over the past decade. The effects that timber harvest restrictions in federal and state forests have had on softwood lumber price, price volatility, and lumber quality, combined with technological advances employed by the manufacturers of substitute materials, have contributed to the increased use of substitute materials in residential construction. The objective of this research was to assess the extent of material substitution in residential construction between 1994 and 1998, as well as to provide insight into the factors driving the changes in material substitution. Results of this study are based on a random sample of 2,400 US residential construction firms and a census of the 100 largest US residential construction firms. This study offers convincing evidence that softwood lumber continues to lose market share in the US residential construction industry and that builders remain concerned about softwood lumber quality, price, and price stability.