Tile Continues Strong Growth in U.S. Market
Despite the struggles of the U.S. economy, tile continues to grow in popularity in the U.S. market, gaining market share at the expense of other segments, primarily resilient. According to data from the Tile Council of America (TCA), tile consumption in the U.S. more than doubled from 1991 to 2001, from 915 million square feet to 2.26 billion square feet. During the economic slowdown of 2002, while many industries saw significant decreases in sales, ceramic tile sales actually increased by 15.7 percent, from 2.26 billion square feet to 2.63 billion square feet.
These figures demonstrate that not only is the ceramic tile industry enjoying a period of significant and sustained growth, but can also endure any difficulties that may arise during these uncertain times; in short, it is proving to be almost "recession-proof."
The continued strength of the ceramic tile industry is due primarily to strong growth in the residential market, which now accounts for 63.5 percent of U.S. tile consumption. Fueled by record low interest rates, new home construction has grown dramatically in the past two years, as have existing home sales. In fact, residential construction for 2003 was the highest since 1978, totaling 1.85 million units, and existing home sales for 2003 set a new record at 6.1 million units, an increase of 9.6 percent compared to 2002. Because interest rates remain at record low levels, this boom in new residential construction and existing home sales is likely to continue. In addition, many homeowners who capitalized on the low interest rates by refinancing their homes are investing in their homes by remodeling.
All of the figures point to a promising future for the ceramic tile industry. Projections for 2003 indicated a projected growth rate of four percent for the U.S., and the growth rate for 2004 will likely be higher, given the continuing increases in construction spending and home sales, a lowering of unemployment rates, and stable interest rates. Ceramic retailers have also expressed an optimistic viewpoint; in the "Ceramic Tile Market Trends Study," conducted by our sister publication National Floor Trends, 68 percent of the retailers surveyed expect an increase in ceramic tile sales in 2004, while only one percent expect a decrease.
If you're wondering how ceramic tile sales will turn out in 2004, your wait is almost over. In the next issue of TILE, we will be presenting our first "Annual Tile Industry Market Overview," in which we will analyze in great detail the current trends in the U.S. ceramic tile market. This data will show the performance of the ceramic tile market through 2003, the most recent data available. There will also be predictions for 2004, based upon the data available, as well as experience in the marketplace. This promises to be a story that you won't want to miss.