Rebound in Building Construction Expected to Drive Increased Demand for Decorative Tile
U.S. demand for decorative tile is forecast to rise 6.7% per year through 2017, reaching 3.2 billion sq ft, valued at $5.7 billion. Gains are expected to be driven by a rebound in building construction spending. The new housing market will see double-digit annual demand growth as housing completions rise from their low 2012 base. Nonresidential demand will also rise at a robust pace, spurred by strong growth in office and commercial construction spending and the increasing use of tile as a durable, low-maintenance flooring alternative to carpets and rugs.
Foreign trade plays a crucial role in the industry; U.S. manufacturers face intense competition in the ceramic tile segment from low-cost producers, while foreign firms with superior access to stone supplies make it very difficult for U.S. manufacturers to offer quality products at sustainable profit margins. These and other trends are presented in “Decorative Tile,” a new study from the Freedonia Group Inc.
Ceramic tile accounted for the largest share of decorative tile demand in 2012, and is expected to remain the leading product type in 2017. Ceramic tile demand is reportedly supported by its low cost and perception as a modern, fashionable surfacing material. However, ceramic tile is predicted to lose market share going forward to stone and porcelain tile, which are seen as having better aesthetic and performance properties.
Natural stone tile is expected to overtake porcelain tile as the second largest type in area demand terms by 2017. Gains will reportedly be spurred by strong residential demand for natural stone flooring; homeowners, for example, are increasingly opting for granite tile flooring because granite is an attractive, durable material that improves the appearance of a room and increases home values.
Porcelain tile demand is predicted to advance about 9% per year through 2017, gaining share in both residential and nonresidential markets. Porcelain tile is durable and slip-resistant, and can be made to resemble such materials as hardwood and natural stone, but at a lower cost. Homeowners can reportedly install porcelain tile as an inexpensive way to enhance the appearance of their homes.
Gains will also come from the increasing use of the product in nonresidential structures, where unglazed porcelain tile finds use in areas with heavy foot traffic, such as shopping malls, office buildings, and health care and educational facilities. However, more rapid growth will be checked by competition from natural stone flooring, particularly in the residential market, as more affluent homeowners opt for stone because it connotes luxury.