Fabricator How-to

Assessing the North American stone market

July 5, 2011
Trans

In this exclusive Stone World interview, Artisan Group Executive Director Chad Seiders shares some insight on stone industry market conditions — now and in the future.

What are you seeing in today’s market? Is there a quantifiable uptick?

I would say in general, there is an uptick occurring in the stone industry. Of course, we thought the same thing last year around this time, but in hindsight, a lot of last year’s demand was driven by the new home buyers’ credit. This gave us a sense of false confidence last May and June, and we saw a hangover when the federal subsidy expired. This time, the demand feels real. Consumer confidence is building back slowly, with the stock market rebounding, and we still have record-low interest rates. The best news of all — for anyone in our industry — is that granite countertops are still in fashion. We would all have to find different jobs and industries if people no longer wanted granite countertops.  

Are there certain markets or regions of the U.S. and Canada that seem to be improving better than others? Are there any regions that are flat or declining?

The markets that are doing best these days are the ones that were not overbuilt with new home inventory during the sub-prime fueled years. Markets like Las Vegas, Phoenix, Southern California and South Florida are still suffering, and fabricators and distributors in those markets are fighting it out for the few countertops being installed. Whereas re-model markets that did not have land for new home construction build-out have rebounded recently as consumer confidence has picked up.  

What about price? Are fabricators and suppliers working on lower margins these days?

In talking to fabricators in Artisan Group, it seems that in 2009 and 2010, offering the lowest price was the number one priority to getting work, and there was a race to the bottom. Now that the dust has settled a bit, quality and customer service are becoming more important than being the absolute lowest price. But it varies quite a bit by market.

In terms of materials, are consumers still willing to pay for high-priced exotics? Has that market fallen off since the recession?

I feel like people who have money are spending again, and this bodes well for high-priced exotics, quartzites and other high-priced materials. One trend we’ve seen since the recession — due to the downward price pressure — is the influx of standard and commercial-grade material. I’m just glad my grandfather — who started in the stone industry in the 1953 — isn’t here to see some of the slabs that are being imported these days. Yet, does the consumer even care? They should, but most of the time they don’t.

Where do you see the market headed in the next five years? In the next 10 years?

In Texas right now, Tuscan — red tile roofs, gold granite, travertine — is out and contemporary — white marble, gray limestones, tile mosaics — is in. All of a sudden, Italy has become a very important source country again for stone distributors, as white marble is difficult to keep in stock. I also think it is a good sign that the leading quartz companies continue to try to mimic stone with their new color additions. As they say, “Imitation is the highest form of flattery.”

What would you say is the biggest challenge for the stone industry in the short-term and the long-term?

When you look at most markets in the U.S. right now, there is an interesting dynamic: There are fewer countertops being installed than prior to the recession, but more fabricators and distributors in each market. As the large, automated shops downsized, the workers they laid off all went out and started their own fabrication shops. The result has been even more competition for fewer countertops and, in many cases, an unlevel playing field because many of these shops do shoddy work, source commercial grade granite, don’t have insurance, worker’s comp, etc. The biggest challenge for the stone industry is to convince the consumer that it is not just about price. When shopping for a granite countertop, there is a difference not only in the quality of craftsmanship, but the actual material itself. Having a fabricator that will stand behind his or her product should matter to the consumer as well. This is why I am such a big fan of the MIA Accreditation program, because companies must abide by these standards to achieve accreditation status.

 

Chad Seiders graduated from the University of Texas at Austin, and he has served as the Artisan Group’s Executive Director since its inception. He is the third generation of his family in the stone business.

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