Demand Expected to Rebound in U.S. Countertop Market
U.S. demand for countertops is forecast to increase 5.1% per year to 750 million sq ft in 2017, representing a brisk turnaround from the declines of the 2007-2012 period, according to a new report from the Freedonia Group Inc. Going forward, countertop demand will be spurred by a recovery in U.S. building construction, and particularly from in single-family housing completions through 2017. Advances are also expected to stem from a relaxation in credit requirements, providing homeowners with needed financing to go forward with countertop remodeling plans.
The residential market is critical to the countertop industry and typically accounts for nearly four-fifths of total countertop demand. Accordingly, rough times for the residential construction market over the last few years did not bode well for countertops. In terms of new construction, the number of single-family homes completed in 2012 was 40% of 2007 levels. Tougher financing standards imposed by banks over the 2007-2012 period also restricted remodeling activity and reduced existing home sales. As a result, countertop demand actually declined over the five year timeframe.
Coming off of this low 2012 base, however, countertop demand is poised for a significant rebound. Through 2017, demand for countertops in the smaller nonresidential market is anticipated to advance 5.8% annually to 131 million sq ft. Approximately 70% of demand in the nonresidential market is from the institutional, office and commercial segments.
Laminates are the countertop material of choice due to their favorable performance characteristics at reasonable price points; just a decade ago, laminates accounted for 60% of countertop surface area. While laminates will maintain their leading position, their share will continue to slide as they face rising competition from a wider variety of surfaces. A drop in the average price for granite (partially due to an increase in low-cost imports) has reportedly extended the availability of this material to a larger portion of the mass market. As such, engineered stone, natural stone other than granite, high-end tile, stainless steel and other metals, concrete, and recycled materials will benefit as high-end homeowners and business owners seek novel, higher value materials to distinguish their countertops from the mass market.
For additional information, visit www.freedoniagroup.com.