SIC 2431
MILLWORK



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 planning 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.

NAICS Code(s)

321911 (Wood Window and Door Manufacturing)

321918 (Other Millwork (including Flooring))

Industry Snapshot

According to the U.S. Labor Department and the U.S. Bureau of the Census, over 2,700 mills in America employ 68,305 workers to manufacture products almost entirely for the construction industry. The Bureau of the Census reported the value of shipments for the industry at over $11 billion in 2000, compared to $8.6 billion in 1997. The composition of output shifted in the late 1980s as renovation and repair increased faster than new construction; however, new construction starts increased significantly throughout the 1990s, in accordance with the growth of the economy. According to the U.S. Department of Commerce, residential construction uses more than 60 percent of mill output, while nonresidential construction accounts for approximately 15 percent.

Continued environmental legislation has put the industry under tremendous supply pressures, although the effect on employment has been minimal compared to the logging, sawmill, and plywood industries. Nevertheless, the pressures are shifting the direction of technological change and marketing techniques in the industry. Most establishments specialize in one product class, such as wooddoor units, stairs, or railings. Although the industry was previously concentrated primarily in the Pacific Northwest, the Midwest, and Texas, new wood suppliers from South America and the second growth of forest in the southeastern United States have shifted some establishments to that area. Imports of both raw materials and milled products have increased dramatically over the last decade.

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 out of solid pieces for high-end uses or, more commonly, consist of a frame, two-panels, and filling. Furthermore, 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 it turned its focus to remodeling, maintenance, and home improvements. During economic downturns, new construction subsides and repair work increases its share of construction activity. Repair work held steady during the recession in the early 1990s, while new construction grew more quickly during the mid- to late 1990s.

According to the reports of the U.S. Department of Commerce in 1996, the primary products manufactured by the millwork industry are doors (30 percent of total industry output), wooden windows and sashes (26 percent), and moldings (14 percent). Increasingly, doors and windows in particular are clad with vinyl, aluminum, or other metals; energy savings have led to the development of vinyl and aluminum windows. Wood windows are regaining popularity, however, because of their strength, beauty, and natural insulating properties. Recent industry developments have allowed aluminum and vinyl clad wood windows to be produced in unlimited shapes and sizes. Solid wood doors, on the contrary, have lost market share in recent years to nonsolid wood doors, steel, and steel-covered exterior doors.

Background and Development

The millwork industry has been impacted by a variety of environmental issues. Logging restrictions on federal lands, based on the concern for the future of the spotted owl and other species and a general desire to leave remaining forestlands untouched, is a major factor in the growth and direction of the wood products industries. Boycotts and export restrictions on tropical wood affect import and export markets. Concern over the effects of volatile chemicals on the health of workers and consumers has resulted in advances in wood treatment. Energy-loss concerns have led to major innovations in window and door production over the last 15 years.

Logging restrictions are a source of particular concern to the industry, as they directly influence the price and availability of millwork establishments' primary production materials. In 1989, environmental groups invoked the Endangered Species Act of 1973 to halt logging in many forests in order to protect the spotted owl. In 1993, the ban was extended to parts of California to protect the California spotted owl, which was listed only as a sensitive species, not endangered. The move sparked debate about trading jobs for the environment. Indeed, the effect of the logging restrictions on jobs was devastating in the northwestern logging and wood products industries. Withtimber harvests reduced by 75 percent from national forests, however, forest-products companies were seeing healthier markets and improved pricing in the late 1990s. Imports also dramatically increased, with the U.S. International Trade Commission estimating that imports of millwork products increased 80 percent during the period between 1992 and 1996.

On April 2, 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 a quarter of the amount permitted at the height of 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 1999, in a continued effort to protect the forests, President Clinton proposed placing 40 million acres of federal forest offlimits 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 nonetheless would increase 50 percent over the next 20 years, and that this proposal would only encourage increased imports from countries with little or no environmental laws. The debate over use of public lands and protection of environmentally threatened species is likely to remain a contentious issue in the industry.

Current Conditions

Forest product mills in the Pacific Northwest took a beating in the 1990s due to environmental legislation, including the protection of the spotted-owl, which led to a reduction in timber harvests on federal lands. This legislation resulted in the closing of mills and loss of jobs in the Pacific Northwest. The impact on the profits for mill owners was mixed. Companies that had private sources of timber or were located away from spotted owl habitats, such as those in southern locales, benefited from the increased price of lumber. This also resulted in increased imports of raw material from foreign countries.

For the millwork industry as a whole, the impact on employment has been minimal. Jobs that were lost in the downturn of the early 1990s and during the logging ban were restored by the economic upturn of the late 1990s, and the increase in total construction spending. Industry workers totaled 109,845 in 2000, compared to 101,301 in 1997. Still, the mill industry is dependent on the supply of wood. Some observers argue that the increase in construction does not guarantee the millwork industry unlimited success. Environmental and regulatory concerns regarding the industry's staple materials—Douglas fir and western pine—remain.

Wood Technology magazine noted in 1999 that millwork plants have sought alternatives to western pine and Douglas fir, which are in short-supply. Some of these alternatives are radiata pine imported from Chile and New Zealand, southern yellow pine, white pine, and hardwoods. Both radiata pine and southern yellow pine are now used extensively in the industry. These alternatives require mills to be flexible in their handling of woods. Each species requires its own methods of treatment, drying, and handling of imperfections. This is necessary 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 wood, or certified wood, is starting to make a name for itself in the industry. Forest owners are certified by an independent source as having sustained their forest—that is, no clear-cutting or other practices harmful to the long-term health of the forest.

Industry Leaders

The privately owned Andersen Corp., based in Bayport, Minnesota, is the leading window and door manufacturer in the industry. It utilizes high-profile marketing to promote its product to the end user and keeps cost down by producing a large variety of standard sizes. The company's 1998 sales were estimated at $1.4 billion.

Pella Corporation, headquartered in Pella Iowa, is the second largest window and door manufacturer, with 1998 sales estimated at $600 million.

Morgan Products Ltd., of Williamsburg, Virginia, is a subsidiary of the Andersen Corporation and manufactures doors, windows, moldings, stairways, and mantels for new and renovated structures; their 1998 sales topped $383 million.

Trus Joist MacMillan is a joint venture of a Canadian forest products company, MacMillan Bloedel, and U.S based Trus Joist Corporation; the company has developed a long-term market strategy of focusing on engineered woods to improve strength and conserve old growth timber. TJM markets most of these products for structural uses such as beams and framing materials. Twenty-eight percent of its business, however, is in windows and doors, which it produces and markets through its subsidiaries, Dashwood Industries, Laffamme & Frere, and Norco Windows. It has begun marketing windows made with laminated strand lumber through these subsidiaries. Total sales for 1998 were $778 million.

Marvin Windows and Doors, with headquarters in Warroad, Minnesota, specializes in high-value custom production for replacement windows and doors and for unusual architectural arrangements on new construction.

Other leading companies in the millwork industry include Jeld-Wen Inc., of Klamath Falls, Oregon; Clopay Corp., based in Cincinnati, Ohio; Huttig Sash and Door Co., of Chesterfield, Missouri.

Workforce

Safety Issues. According to the U.S. Department of Commerce, the millwork industry has a high accident rate—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; it was lower, however, 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 have received attention in recent years include the 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 believes that many accidents could be prevented through education, training, and minor machinery enhancements.

Employment. In 2000 the U.S. Bureau of the Census reported that 109,000 people were employed in the millwork industry, earning an average hourly rate of $12.70. Total payroll reached nearly $3.2 billion in 2000. According to the U.S. Department of Labor, despite the large number and variety of machines employed in the industry, it is quite labor intensive. For each dollar of value that mills add to raw materials, it uses 72 percent more production-worker hours than in the manufacturing industry as a whole. According to Brad Knickerbocker, writing in the Christian Science Monitor, technical innovation has enabled the membership of the timber industry to record gains in productivity of as much as 40 percent; this has created a corresponding decline in timber industry employment. More recently, especially with the shortages of raw materials, technological innovation has taken a shift toward the maximization of materials savings, rather than labor savings.

The millwork industry is moving increasingly toward the use of computers in both the design and manufacturing processes. Although the employment outlook for woodworkers is expected to grow more slowly than average through 2006, according to the Occupational Outlook Handbook, skilled woodworkers with computer expertise will be in demand. It is also predicted that the increase in population and the strong economy at the turn of the century should provide steady employment in the millwork industry, as new homes are built and repair work is needed. Employment opportunities in the millwork industry are now available in all regions of the country, according to the U.S. Department of Commerce, with the vast majority of establishments employing under 100 people.

America and the World

Trade patterns in millwork and other wood products have undergone considerable change recently due to environmental pressures, and the reduction of trade barriers. Total trade rose from $735.6 million to $1.1 billion between 1992 and 1996, according to the U.S. International Trade Commission. Throughout the mid-1990s the United States had a trade deficit in millwork. The only countries with which the United States had a surplus were Japan, South Korea, and the United Kingdom. This was a shift from the early 1990s, due in large part to a weak dollar.

Imports. Developing countries have the advantages of low-cost labor and cheap, abundant raw materials when competing in international trade. They have utilized these advantages to develop their woodworking industries and to consequently increase their exports of furniture and millwork products to America.

Imports of millwork increased an astounding 80 percent from 1992 to 1996. The total value of shipments rose from $445.3 million to $799.6 million during this time period. Imports came from Mexico (26 percent), Canada (21 percent), Chile (9 percent), Thailand (8 percent), Indonesia (8 percent), China (5 percent) and Malaysia (5 percent). Moldings were the largest category of imports, totaling 40 percent, followed by picture frames and doors. According to the U.S. International Trade Commission 80 percent of millwork imports were duty free, mainly due to the North American Free Trade Agreement and the Generalized System of Preferences (GSP). In 1995, Canada and the United States signed a timber pact that restricted U.S. duty-free timber imports to 14.7 billion board feet of Canadian lumber.

Environmental concerns have reduced the international supply of millwork's principal raw material, logs, although the U.S. Supreme Court's reversal of a federal law restricting log exports has somewhat eased international supply. Indonesia banned the export of logs in the early 1980s to slow the consumption of its own forests while expanding employment in wood products industries. By doing so, the Indonesian government stimulated the development of wood processing industries such as milling and plywood. According to a report in The Nikkei Weekly , however, plywood plants began shutdowns in 1996 due to a lack of logs. Only 70 percent of mill demands were met in 1995. Malaysia also recently restricted its exports of raw logs to preserve its forests and develop its woodworking industries.

Exports. Exports fell from $290.3 million in 1992 to $274.2 million in 1996. Lower exports to both Canada, which had lower housing starts, and Mexico, which suffered from an economic downturn, accounted for a large portion of the decline. The next largest market for U.S. millwork exports was Japan, which also suffered an economic downturn. In the late 1990s, the country began to recover and is expected to remain a strong market for U.S. millwork exports. The European Union is not considered a viable market for exports, as it is largely supplied by internal members. The majority of exported millwork products were doors, moldings, and windows, in that order.

Research and Technology

Concerns about energy costs, maintenance requirements, and personal security have led to significant technological changes during the last two decades. Environmental restrictions on raw materials and worker safety are leading the current wave of changes.

For both doors and window frames, the newest technological advances are in the area of materials conservation. Sustained high costs for woods such as Douglas fir, Ponderosa, and other western pines have spurred innovation in window frame and door production, such as 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. Increasingly, composite materials are used as substitutes for solid wood parts, while window frames are produced from such engineered woods. As the industry continues to substitute engineered woods such as laminated strand lumber for sawed wood, it will have 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 will also play an important role in product design and manufacturing.

Further Reading

Andersen Corporation. Company Web Page. Available from http://www.andersenwindows.com .

"Clinton's Plan to Protect U.S. Forests." The San Francisco Chronicle , 14 October 1999, A1.

Hoover's Online. Available from http://www.hoovers.com .

Industry & Trade Summary: Millwork. USITC Publication 3096. U.S. International Trade Commission Office of Industries, April 1998.

JELD-WEN Inc. Company Web Page. Available from http://www.jeld-wen.com .

Marvin Windows and Doors. Company Web Page. Available from http://www.marvin.com/ .

Morgan Products Ltd. Company Web Page. Available from http://www.morganproductsltd.com/ .

Occupational Outlook Handbook . U.S. Bureau of Labor Statistics. Available from http://stats.bls.gov/ocohome.htm .

Pella Corporation. Company Web Page. Available from http://www.pella.com .

Sampson, William. "Modern Technology Makes Millwork Shop Competitive." FDM , November 1999, 58-65.

Stovall, Kevin. "Millwork industry faces opportunities, challenges." Wood Technology , March 1999, 48-54.

Trus Joist MacMillan. Company Web Page. Available from http://www.tjm.com/ .

United States Census Bureau. 1997 Economic Census. Manufacturing Industry Series. Other Millwork (Including Flooring). Available from http://www.census.gov .

United States Census Bureau. 1997 Economic Census. Manufacturing Industry Series. Wood Window and Door Manufacturing. Available from http://www.census.gov .

United States Census Bureau. Annual Survey of Manufacturers. Available from http://www.census.gov .

United States Census Bureau. Lumber Production and Mill Stocks , November 1998.

United States Census Bureau. Statistical Abstract of the United States, 1999.

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .



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