Stone Column: Fabricator outlook: â€œCautious optimismâ€
A total of 58.2% of stone fabricators said they expected business to increase in the coming year. Last year, that figure was 75%. So the feeling is still positive, but not overwhelming. Of those not predicting an increase, 34.3% said business would hold steady, and only 7.5% predicted a decline.
The outlook of fabricators over the next five to 10 years is more upbeat. A total of 78.8% of the fabricators we polled predicted growth, and 16.4% said business would hold firm over that time, with only 4.7% predicting a decline. Some other notable points were as follows:
- 69% of fabricators said their business increased from 2005 to 2006, and another 23.8% said it held steady this year. Only 7.3% saw a decline.
- Most fabricators feel the dip in home sales or housing starts will not hurt their business, due to increased work in the remodeling sector.
- One-third of fabricators said their business was affected by increased competition (new stone fabricators) in the marketplace, but very few feel competition from solid surfacing such as Corian. And even the ones who were hurt by competition said the losses were minimal.
Fabricators were also asked about their purchasing plans for 2007, and based on their responses, many fabricators in the U.S. are investing in their shops to meet market demand and stand out against the competition. Their responses included the following points:
- One out of seven fabricators (14.8%) will be purchasing CNC equipment, which is pretty significant when considering that the mean dollar amount they expect to spend is over $211,000.
- The mean dollar amount to be spent on bridge sawing equipment rose from $55,000 in 2006 to $78,000 this year, which makes sense when considering that these saws are getting more and more advanced. A total of 20% of fabricators will be investing in this area.
- Looking at relatively new technology, 20% of fabricators will be spending a mean dollar amount of $10,000 on management software next year, and 11% will be spending a mean dollar amount of $21,000 on digital templating systems.
Speaking on the challenges facing today’s fabrication shops, survey participants said new competition in stone fabrication is not only coming from small start-up shops, but from large-scale solid surface and laminate fabricators who move into the stone industry. “Price cutting and poor quality by large automated fabricators is damaging the industry far more than demand or solid surface,” stated one respondent.
However, in general, the fabricators felt that maintaining high craftsmanship standards will generally keep them ahead of competitors who sell solely on the basis of price - both in the coming year and especially over the long term.