The building and ceramics tiles market in America

The trend in the ceramic tiles market in the United States is closely related to the trend in new housing constructions, which accounted for approximately 30% of tiles sales into 2016. When building work was at its peak in 2006 just before the recession, this percentage had risen to almost 40%. Whereas the number of new constructions has fallen by almost 70%, the drop in tiles sales has been less drastic due to the fact that other industries using tiles, such as housing renovations and constructions and non-residential redevelopments, has dropped less markedly.

The renovations/redevelopments sector is important indeed: the recession has impacted less seriously on renovations compared to the industry for new constructions. The renovations sector is mainly based on spending by people renovating properties (both residential and non-residential) to keep them in good repair, as well as spending by people buying old houses and adapt them to their own tastes.

Spending on renovations is expected to increase throughout 2017 due to the fact that sales of existing houses have reached an annual figure of 5.71 million units and in March 2017 they were up 5.9% compared to the same period in 2016.

According to the Harvard Center For Housing Studies, spending on renovations will increase at a rate of approximately 6% in 2017.

The importance of the non-residential building sector has returned to the levels it had reached before the recession. A factor negatively influencing this market segment is the decrease in the number of department stores due to the sudden boom in the online sales industry. Chains of department stores like Macy’s, Sears, JC Penney and others are reducing the number of their sales outlets, most of which are now located in suburban Malls. The closure of hundreds of these department stores is freeing up huge empty spaces and discouraging the construction of new retail facilities.

TILES SALES IN THE UNITED STATES

The trend in tiles sales in 2016 has been positive with a further increase of 5.8% following a rise of 9.9% the previous year. Nevertheless, it is worth remembering that these figures and percentages are based on “apparent consumption” or, in other words, tiles entering distribution channels, like sales by American manufacturers to their customers and tiles imported by distributors and cleared through customs. Not all tiles sold wholesale are actually bought by consumers and those left in retailers’ or distributors’ warehouses also count as “apparent consumption”. Figures about “apparent consumption” are published in the United States because there are no accurate estimates of real sales. In 2016, ceramic tiles sales in the United States were 269 million m². Imports of 185 million m² accounted for almost 69% of the total, while deliveries by American manufacturers were just 31%.

All leading local tiles manufacturers have seen their sales rise compared to 2015. According to what was published in the May 2017 issue of the magazine Floor Focus, Daltile recorded sales of $1.410 million compared to $1.133 million in 2015, a figure due to the acquisition of Marazzi’s three American factories and the opening of a new plant. Crossville recorded sales of $158 million ($150 million in 2015). Sales also increased for Florida Tile belonging to the Panaria Group ($128 million in 2016 and $118 in 2015), Stonepeak belonging to the Iris Group ($126 million in 2016 and $120 million in 2015) and Florim USA ($113 million in 2016 and $105 million in 2015). No figures were published for other factories owned by the Italian companies Del Conca and the Concorde Group, which were built fairly recently, and Wonderful’s new factory financed by Chinese backers.

In 2016, the main countries supplying tiles to the United States were, in order, China with 54 million m² at a cost of $409 million; Mexico with 43 million m² at a cost of $251 million and Italy with almost 36 million m² at a cost of $617 million.

Ceramic tiles sales are expected to rise by around 6% in 2017. The driving forces behind these increases are new constructions and renovation work, while rising interest rates are slowing down sales if these rates should rise, property mortgages will also increase along with the cost of raw materials.