Industry Outlook
A forecast for the countertops industry for 2017 and beyond By Kevin Cole, Editor Forecasting is never a simple task. Our economy to align. The general economy is subject to
However the Fed is more optimistic, projecting
U.S. Housing Starts Historical Data
has many complex pieces that are difficult
the unemployment rate to drop to 4.5 percent in
change based on a variety of factors, and some
Year
Total
Singlefamily
Multifamily
factors while others will falter. However, in any
2006
1,801,000
1,465,000
336,000
2007
1,355,000
1,046,000
309,000
2008
905,000
622,000
283,000
2009
554,000
445,000
109,000
2010
587,000
471,000
116,000
2011
608,800
430,600
178,200
2012
780,600
535,300
245,300
2013
924,900
617,600
307,300
2014
1,003,300
647,900
355,400
2015
1,111,200
714,600
397,300
2016
1,174,300
781,600
392,600
markets will hold up through change in these
industry there are indicators that can help make an educated guess as to what the future holds.
Examining those indicators most closely related to the countertop industry should help make an
estimation of how it will fair in 2017 and beyond. Anecdotally, the industry has been doing quite well. However, to get a true estimation a study of the available data must be performed and
the opinions of the experts must be factored in beginning with the general economy and
factoring down through related markets to the
most specific information. Of course, conditions are subject to local and regional factors that are
Source: U.S. Census Bureau
difficult to take into account when looking at
Figure 1
the broad view, so there will obviously be some variance. And, the unique political atmosphere
could also come into play in unpredictable ways. Those incalculable factors aside, the predictors
that follow should allow for an estimation of what is to come.
The experts believe GDP will continue to grow in 2017, with the CBO predicting an average rate of about 2.1 percent, but falling back to 1.9 percent in 2018. Likewise, the latest economic projections of the Federal Reserve Board have 2017 GDP pegged at a growth rate
The General Economy
of 2.1 percent and dropping to 1.9 percent in
Looking at 2016, the general economy
continued in the correct direction. According to
Congressional Budget Office statistics released
in late January, the average increase in real GDP
2018. The Conference Board, a global, business membership and research association, has 2017 GPD averaging at 2.3 percent.
in 2016 was about 1.6 percent, with it ending in
Unemployment ended at 4.8 percent in 2016,
2017 and staying there through 2019. In the latest Construction Outlook by FMI, a construction industry consulting company, CEO Chris Daum said, “The election was a big point of uncertainty and contention. With that behind us, many of our clients are cautiously optimistic—if not even bullish—on the U.S. engineering and construction industry going into 2017. Favorable general economic conditions, a high level of consumer confidence and the potential for tax reform and increased federal spending all promise to keep the industry on track for yet another positive year. Of course, with this optimism comes a dose of pragmatism, including uncertainty about what these new policies and regulations will look like and whether Congress will have the ability (or the will) to enact legislation that’s favorable to the E&C industry.” Housing The decorative surfacing industry is closely tied to the housing market, and it showed strong overall growth once again in 2016, but when scrutinized, all of the growth was in single-family homes. While still well below peak levels in 2006 during the housing bubble, in 2016 housing starts grew overall by almost 6 percent. However, multifamily units, which have seen steady growth since 2009, actually fell by about 1.2 percent in
2016 (see Figure 1). That said, they are still well
Q4 at 1.9 percent. This is down from 2015, which
below the “full employment” marker of 5 percent.
averaged at about 2 percent. The first quarter, as
According to Trading Economics, a research
above 2006 levels. Single-family home starts,
is typical because of winter, was only 0.8 percent,
firm with 10 years of global economics research
though, grew by more than 9 percent in 2016.
rising to 1.4 percent in Q2 and hitting a high at
experience, the drops in the unemployment rate
And once again, by far, the strongest residential
3.5 percent in Q3. However, it fell back to just 1.9 percent in Q4.
(last year from 5 to 4.8 percent) will level off in 2017 and remain at the same 4.8 percent rate.
building trends are in the South, with the second highest growth rate being in the West.
Nonresidential Building Construction (in millions of U.S. $) Type
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Lodging
35,806
25,499
11,635
9,129
10,836
13,585
16,839
21,728
25,912
28,214
29,124
Office
68,563
51,908
37,850
36,011
37,800
41,344
44,491
55,188
66,700
72,329
74,636
Commercial
86,212
54,069
40,100
42,816
47,335
50,992
57,877
66,924
72,386
76,974
79,307
Healthcare
46,902
44,845
39,344
40,204
42,544
41,484
41,038
40,734
41,365
43,014
44,955
Educational
104,890
103,202
88,405
84,985
84,672
77,996
78,464
83,517
88,276
94,317
99,609
Source: FMI Construction Outlook — Q4 2016 - 2018 based on forecasted information Figure 2 30 • Vol. 10 / Issue 1 • International Surface Fabricators Association