Every year, Stone World’s parent company, BNP Media,
conducts an in-depth survey among U.S. stone fabricators. This survey
gauges their short-term and long-term market predictions and their capital
outlay and purchasing plans for the future. It also asks them to look back on
the previous year and give an overall snapshot of the change in business
climate.
This survey was completed by more than 300 stone fabricating shops of all sizes
and experience levels across the country (not a bad number considering the busy
life of a fabrication shop owner/manager). Although the full report — including
the spending plans of fabricators for 2009 — can be found on page 56 of this
issue, I would like to touch on some key points of this survey
here.
Predictions for the stone market in 2009
Grow - 22.6% • Decline - 40.0% •
Stay the same - 37.4%
Quick Analysis: Perhaps surprisingly, 60% of people don’t expect their business
to decline in 2009, although just a little more than one in five expect to see
any growth next year. Another disappointing point: just about two-thirds of
those predicting a decline said that it would be more than
11%.
Predictions for the stone market over the next 5 to 10
years
Grow - 75.8% • Decline - 9.5% •
Stay the same - 14.7%
Quick Analysis: People still think this business is on the upswing in general.
For the most part, fabricators cited the cyclical nature of the economy and the
continued popularity of granite as reasons for long-term
optimism.
How was business in 2008 compared to 2007?
Increased - 38.5% • Decreased - 43.1% •
Stayed the same - 18.4%
Quick Analysis: A total of 56.9% of fabricators didn’t see a decline in 2008.
Given all the horror stories I’ve heard, I would have thought this figure would
be much worse. Now for the bad news. The real banking/credit industry collapses
occurred during the second half of 2008, so many fabricators enjoyed their
greatest success during the first six months of the year. Also, for fabricators
who saw a decline, the hit was fairly sizeable (61.4% said the decline was 11%
or greater).
Did the radon scare hurt your business in 2008?
Yes - 25.4% • No - 74.6%
Quick Analysis: On a personal note, I was extremely pleased to see these
results. It seems that the “BuildClean”
backers wasted a lot of money trying to get everyone riled up on this issue,
especially since the vast majority who said they were affected said that the
decline was only between 1 and 5%.
Will the radon scare have a long-term effect on your
business?
Yes - 12% • No - 88%
Quick Analysis: Again, it appears some folks wasted a lot of money on
propaganda that was largely dismissed after a couple of
months.
Other notes to consider:
- Looking at the biggest factors in the business downturn: 43.7% said it was
the decline in the housing market; 28.8% felt it was competition from low-end
fabricators; and 24.6% said it was the banking/credit industry crisis. Just
about no one felt it had to do with the devaluation of U.S. currency (2.6%) or
the granite/radon scare (0.4%).
- A total of 57% of fabricators said they will invest in equipment in 2009
(although 39.1% said the dollar figure they spend will
decline).
- The biggest cut fabricators are making is in the area of personnel (61.7%).
They are trying to make personnel cuts through attrition whenever possible.
- A total of 10% of fabricators are planning to invest in CNC technology in
2009, which is significant when you consider an average price of nearly
$200,000 expected to be spent.
So there it is, from the backbone of our industry — the stone fabricators. The
outlook is, at best, mixed. But it is not all gloom and doom, and some
fabricators are planning to make some heavy investments this year. So maybe
there will be a tomorrow after all.
Michael Reis,
Editor/Associate
Publisher
