The U.S. ceramic tile industry grew 3.8 percent in 2005, according to the most recent statistics from the U.S. Department of Commerce. While this increase is much smaller than the increase in the previous year, it is nonetheless impressive given current economic conditions, particularly the ongoing cooling in the housing market. A recent report by the Federal Reserve indicates a distinct slowdown in housing sales, as well as lower asking prices and rising inventories of unsold homes. So far, the Fed has not cut interest rates, which suggests they anticipate a brief correction in the market rather than a full-blown recession. Aside from the housing market, the U.S. economy is doing well, with the GDP rising 3.4 percent in 2005, and 2.6 percent in the second quarter of 2006. Furthermore, oil prices have finally started to settle down after reaching record highs earlier this year, which will reduce transportation costs for ceramic tile manufacturers.
These and other economic factors which affect the ceramic tile industry are presented in detail in this issue ofTILE Magazine, in the third annual State of the Industry Overview. Special thanks to the Tile Council of North America for presenting this important information to our readers. Having the right data is crucial to understanding our market, but it's equally important to understand what's going on in the minds of the key decision makers in the industry. With that in mind, we created a new feature, theTILEIndustry Viewpoint. In this eye-opening feature,TILE Magazinespoke to some of the key figures in the ceramic tile industry, to find out about current market conditions, their predictions for the future, and their strategies for growing the industry. While the opinions of those interviewed vary widely, they seem to share a common thread of optimism regarding the long-term outlook for the industry, as well as confidence in the ability of ceramic tile to capture increasing market share from today's fashion conscious consumers.
Having recently attended the world's largest ceramic tile exhibition, Cersaie, I share this optimism and confidence in tile's ability to capture the consumer's attention. It is always amazing to witness the myriad forms that ceramic tile can take, from simple rustic designs and subtle shades to the most ultramodern shapes and textures and bold new colors imaginable. Whatever the consumer is looking for, whether it is old world stone or ultra chic shimmering metal, tile can achieve the desired look. It is this ability to appeal to almost everyone that holds the key to tile's ongoing success.