FEATURE
SPOTLIGHT ON: FLOORING THE FUTURE
Thanks to AMA Research we now have a better indication of where the flooring market stands today, and what we should expect over the next few years.
The recession has hit the UK market in all areas of production and business in recent years, no matter what the industry – and some have felt it worse than others. But the flooring world is one that can normally feel fairly safe. After all, we all need floors, whether it’s in a new build, or being restored.
But of course, when times are tight, we all feel the pinch. The floorcoverings market has certainly taken a beating; in the end, flooring is a decoration rather than a necessity to many. And good quality floors don’t often come cheap, without a catch.
As the saying goes, we can’t know where we are going until we know where we are coming from. So what do we know about the past few years in the industry?
General overview Despite moderate rates of growth from 2005 to 2007, in light of the current recessional impacts the floorcoverings market experienced a decline of approximately 18% from 2008 to 2010, with an overall market value of just under £1.8 billion. This decline varies across the all market sectors, with vinyl recording the most positive performance.
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Domestic and contract sectors There is also a variation across the domestic and contract sectors; with the housing market falling by up to 50% from their 2007 peak, the demand for floorcoverings, such as carpet and laminates, has been depressed. Similarly, the contract sector has seen a reduction in demand from key industry sectors, such as offices and retail, while selected public sectors have remained fairly positive thus far e.g. health and education.
Price pressures Cost has also become an issue as the market has remained under significant price pressures, with many manufacturers unwilling or unable to pass on increased costs to consumers. This issue has also become more apparent in the contract sector once again, resulting in some product substitution and specification switches as main contractors strive to reduce costs.
Imported floorcoverings While the UK market has suffered a decline, import penetration levels for the majority of floorcoverings remain high. While Sterling exchange movements in
2009 and 2010 mean that imports from European producers are now generally higher, than in the recent past, there is very little evidence of this leading to reduced prices pressure within the market.
Product mix Generally the floorcoverings product mix has remained relatively stable since 2008, with only moderate changes experienced by the major products groups.
Carpet currently dominates the mix with an estimated value share of 56% in 2010. This figure is down from 57% in 2008. Wood flooring has also suffered slight share decline, with reducing sales for laminates from 2007- 2010 and value decline of 30% over the period.
In contrast, vinyl has performed relatively well with value decline of only 5% from 2008-2010, with buoyant demand from health and education helping to sustain the market.
However, domestic vinyl sector has been significantly hit by the downturn in the housing market. Armstrong’s recent decision to exit the UK domestic sector indicates that there are tougher conditions for domestic vinyl.
The domestic market also illustrates that the “improve not move” trend has continued to benefit the ceramic tiles and natural stone sectors during 2010, particularly for kitchen and bathroom refurbishments.
Other trends include sustainability and recycling, issues that have become more important for all building and home improvement products in recent years. The floorcoverings market is embracing new initiatives and schemes, such as Carpet Recycling UK and Recofloor achieving greater prominence between 2008 and 2010.
So what can we expect in the next few years? Of course it is easy to assume that after a time of decline, the opposite is sure to be just around the corner, but this may not be the case quite yet.
In fact, the forecast for this year is that the market will remain relatively flat with any changes likely to be moderate. This situation isn’t likely to be any different until the housing market recovers, estimated to happen midway through the year.
But it’s not all doom and gloom for the future. The UK
www.tomorrowsflooring.com
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