Tag Archive | "Industry Outlook"

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2015 Housing Outlook Remains Positive – A Good Sign for the Countertop Industry

Posted on 15 June 2015 by cradmin

Despite a recent report stating that commercial building is still struggling, the outlook for the countertop industry remains bright as the second quarter of the year nears its end. According to the National Association of Home Builders (NAHB), new home sales rose by 6.8 percent this April at a seasonally adjusted rate of 517,000 units, and confidence in the multifamily market remains steady.

Home Sales on the Rise

New data from the Department of Housing and Urban Development (HUD) shows that home sales increased, but results in the nation vary widely in different markets. In the Midwest, home sales increased by 36.8 percent, but the Northeast experienced a decline of 5.6 percent while the South witnessed a decline of 2.3 percent.

Tom Woods, chair of the NAHB said, “Sales are moving forward, and our builder members are telling us they are starting to see more activity as more buyers get off the fence and enter the marketplace.”

Chief economist of the NAHB, David Crowe, concurred, stating, “Following an unusually low sales report in March, today’s numbers are consistent with other data we’ve seen recently and indicate a continuing, gradual improvement in the housing market.”

Housing Starts Increase

In addition to an increase in sales, housing starts jumped by 20.2 percent in April for an adjusted annual rate of 1.135 million homes, according to the U.S. Department of Commerce. This is the highest increase we’ve seen in the U.S. since the recession first began to hit in November 2007.

Breaking down the numbers, we see that single-family housing starts rose by 16.7 percent while multifamily starts increased by 27.2 percent. “Our builders tell us that consumers are slowly returning to the market,” said Woods. “This month’s report shows release of pent-up demand and evidence of a sustainable housing recovery.”

Crowe also applauded the numbers but pointed out that single-family housing is still only about half it what is should be in a fully recovered market. “With low interest rates and affordable home prices, we expect more upward momentum in the months ahead,” said Crowe.

Even though sales have dropped in the Northeast, this region accounts for an 85.9 percent increase in starts while residential building starts fell by 1.8 percent in the South. In the Midwest, starts rose by 27.8 percent, and the West saw a gain of 39.0 percent.

Multifamily Production Index Holds Steady

Another article from the NAHB reports that the national multifamily market has held steady through the first quarter of 2015 as measured by the Multifamily Production Index (MPI), which was at 54 at the beginning of April. This marks 13 consecutive months the MPI has had a score of 50 or higher.

The MPI was designed to measure the confidence of builders and developers in the current market, and the scale runs from zero to 100. Any score that is higher than 50 reflects that a greater number of reports show that conditions are improving rather than declining.

“Multifamily developers remain positive about the market,” said Dean Henry Stanton, chair of the NAHB Multifamily Leadership Board. “We’ll continue to see increased demand as new households form and the job market improves.”

June Is National Homeownership Month

As National Homeownership Month comes to a close, it has become evident that the increase in sales and starts may be because of the increased affordability of homes across the country. According to the NAHB/Wells Fargo Housing Opportunity Index, 66.5 percent of homes sold in the first quarter of 2015 were affordable to families with median annual incomes as low as $65,800.

At the end of March, the median home price in the U.S. was $210,000, down from $215,000 at the end of 2014.

First-time home buyers are also taking advantage of special programs, including those that offer low down payments, which is helping to push up sales. In some instances, Fannie Mae and Freddie Mac are underwriting loans for first-time home buyers with as little as 3 percent down. In addition, the average interest rate on mortgages fell from 4.29 percent to 4.03 percent.

The NAHB has been pushing Congress to ease restrictions on credit conditions for some time, and in April, Chairman Tom Woods testified before the Senate Banking Committee at a hearing on obstacles to obtaining new mortgages.

Woods is a strong advocate of the Portfolio Lending and Mortgage Access Act, which he said“is intended to ease the ability to repay requirements for community lenders who may fear originating non-qualified mortgage loans.”

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ISFA 2015 Countertop Forecast Predicts Another Solid Year

Posted on 20 March 2015 by cradmin

ISFA Q! industry forecast lead-inA few weeks ago, the International Surface Fabricators Association (ISFA) published its annual Countertop Industry Outlook for 2015 in its magazine Countertops & Architectural Surfaces. This forecast for the coming year is the only one of its kind published openly that we are aware of, and it is not specific to only one kind of surfacing material. It is researched and written by the magazine’s editor and ISFA Communications Director Kevin Cole, who predicts fabricators and others involved in the countertop industry can expect “another year of continued growth.”

This is expected to be the third year in a row of industry growth after the economy began to recover from the Great Recession. According to the 2013 industry forecast, the economy was still a bit sluggish, but was beginning to look up. Since that time, growth has continued in the general economy and most industries.

Because there are very few sources available that specifically focus on countertops, the Industry Outlook is based on data that is indicative of countertop demand, beginning with the general economy and then looking at more closely allied areas, such as U.S. housing starts data, nonresidential building construction, home improvement product sales, remodeling predictions, cabinet sales and more. If you aren’t ISFA members receiving this publication, we strongly suggest you sign up for it. Right now subscriptions are free to qualified individuals in the United States.

Taking all of the sources into consideration, the forecast from ISFA has been anchored for the last three years by a 382-page report from The Freedonia Group offering predictions on the countertop market through 2022. According to this report, demand for countertops in the United States is expected to increase by 5.1 percent through 2017, spurred by building construction, single-family home completions and a relaxation in credit requirements for remodeling loans.

According to the Freedonia report, the demand for laminate countertops is expected to decrease from a 60 percent share of the market 10 years ago to 47 percent by 2017. Natural stone is predicted to make the largest gains with quartz surfacing/engineered stone coming in a close second. In addition, countertops made of “other materials,” such as concrete, metal and recycled products, should grow by 7.2 percent per year through 2017. It also makes predictions about tile, solid surface and other cast polymers.

Other specific factors that led to the favorable outlook for 2015 include the expected growth of the national GDP of 3.1 percent and increase in housing starts from 924,900 in 2013 to more than 1 million in 2014. In addition, predictions for nonresidential construction are up across the board.

However, beyond the ISFA forecast, one of the strongest indicators of a great 2015 for the countertop industry comes from anecdotal evidence provided to us by our general audience, which includes thousands of fabricators across the country. Talking with fabricators at KBIS and TISE this year and communicating with many others online and by phone, we have heard very little bad news. Most of our readers cannot deny that business is up, and many are expecting growth to continue in the future.

We are currently working to uncover specific information about the countertop industry (as well as how we are doing serving you) through our own Countertop Industry Survey, and we would love to hear what you have to say. To help you make our data as complete as possible, we invite you to take the survey and have your name entered for a drawing to win one of two $250 gift certificates to Best Buy. You can start the short survey by clicking here now.

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