many American stone fabricators, 2009 was the most difficult year ever to run a
business. Since many fabrication shops in the U.S. are relatively young in age
(typically less than 20 years old), business owners have never felt a recession
that came close to what we’ve seen over the past few years. But for the most
part, fabricators feel that the worst is behind us, and they are relatively
optimistic for 2010 and beyond. These are the results of a survey conducted by
the Market Research Department at BNP Media (Stone World’s parent company), and
it polled a cross-section of fabricators across the U.S., including large and
small firms as well as relatively new and well-established companies.
Looking at the coming year, the vast majority of fabricators polled truly felt
that declines will not continue. A total of 45% said the stone market will
increase in 2010, and 40% said it would stay the same. Only 15% said there
would be a decrease in business this year.
The fabricators expecting growth for the year varied in how much they believed
business would increase, although most (69%) said that business would grow by
more than 6%, and nearly one in eight fabricators (12%) predicted growth of
more than 20%.
A number of reasons were offered for the optimism in 2010, and many pointed to
an improving economy. “An upsurge in recent business gives me hope that the
businesses that did survive the recession will continue to see this upsurge -
not that it’s over yet, but so far we have survived,” stated one fabricator.
“The ones that didn’t make it will lead to more business for those of us who
are starting to spend money again,” reported another respondent. “I believe as
the economy continues to stabilize, we will continue to see this spending
trend. Also, as the housing market begins to expand again, this will drive
further consumer spending.”
Fabricators also said that remodeling work seems to be on the rise. As one
respondent pointed out, “Homeowners have put off installing granite or doing
renovations, but now with an upswing on incomes in the near future, we will see
an increase in these projects.” But even while some fabricators were
optimistic, others feared that increased traffic and activity may not result in
actual business for a few months. “We expect a very slow start to the year,”
stated one fabricator. “There are some projects going to architects now, but
they will be six months on the drawing board. Residential customers are still
slow to commit to contracts.”
The outlook of fabricators over the next five to 10 years was even more
positive. According to the Stone World survey, more than four out of five
fabricators (83%) feel that the market for stone in the U.S. will grow
over the next five to 10 years. Another 11% felt the market would remain the
same, and only 6% were predicting a decline.
Following the trend expressed in last year’s survey, however, they were guarded
in predicting a large increase in sales. Only 32% of fabricators overall felt
that growth would be 11% or more over the next five to 10 years.
asked about their long-term optimism, fabricators again pointed to the eventual
recovery of the market, along with increased popularity and awareness of stone
among home-owners. “Eventually we will all decide that the world was not
actually ending, and business as usual will resume,” stated one survey
respondent, while another commented, “It is going to take a couple of years for
the market to correct itself, but when the industries realize it is up to them
to help bring the economy back, it will begin to take
Some fabricators pointed to general improvements in the industry itself as
reasons for long-term optimism. “Technology is still increasing daily,” stated
one survey participant. “Stone applications in the building sector are becoming
more and more creative.”
After a year of cutting costs - 88% of fabricators polled said they decreased
spending in 2009, primarily in the area of personnel - it appears that
fabricators are planning to invest back into their operations this year. “Banks
will return to allow some credit for machinery and expansion,” explained one
According to the Stone World survey, 57% of fabricators said they will be
investing in marketing, and 50% reported that they will invest in equipment in
the coming year.
In terms of equipment choices, hand tools were once again mentioned by the
majority (60%) of fabricators, and they expect to spend an average of nearly
$7,000 in this area.
terms of larger investments, the percentage of fabricators planning to purchase
big ticket items is predictably small, but still significant when considering
the amount of money they expect to spend. More than one out of 10 fabricators
(11%) said they will buy a CNC stoneworking center machine this coming year,
expecting to spend close to $190,000 in the process. A similar total (9%) said
they would be investing in waterjet technology, and they expect to spend close
Nearly one out of five fabricators (17%) said they will buy a bridge saw this
coming year, and reflecting the growing level of automation for this equipment,
they are expecting to spend an average of nearly $80,000. The same percentage
of fabricators (17%) said they would be purchasing a polisher this coming year,
expecting to spend close to $50,000.
the continuing need for air and water treatment in fabrication shops,
approximately one out of six shops said they will invest in this technology in
2010, expecting to spend more than $20,000. Also in the area of improving the
overall shop environment, one out of three fabricators will invest in handling
equipment, expecting to spend close to $35,000.
New technology is also being purchased for operations beyond the shop floor. A
total of 11% of survey respondents said they would be investing in digital
templating technology in 2010, spending an average of more than $16,000 each;
and 12% said they would be purchasing management software this year, spending an
average of nearly $8,000.
Although still relatively moderate - considering the small size of the average
fabrication shop - capital outlay among fabricators looks to be improving in
2009. A total of 34% of respondents said they are planning to outlay more than
$250,000 in 2010. (Last year, that total was 27.9%).
In addition to asking about the future, the Stone World survey asked
fabricators to compare the business levels for 2009 as compared to 2008. Responses
to this question showed just how difficult the last 12 months have been, as 68%
said their business declined in 2009, another 13% said that business stayed the
same, and a surprising 19% actually said business grew in 2009 (although
typically less than 10%).
For companies that saw a decrease in business, the losses were significant. A
total of 23% of respondents reported declines of 11 to 20%, and an additional
54% of fabricators said that business was down by over 20% in 2009.
fabricators were relatively split between companies reporting more than $1
million in annual sales (47%) and those reporting less than $1 million (53%).
Broken down further, 30% said that sales were less than $500,000; 23% reported
sales of $500,000 to $1 million; 29% reported sales of $1 million to $2.9
million; 93% reported sales of $3 million to $4.9 million; and 8% reported
sales of over $5 million.
Speaking on challenges facing fabricators in today’s marketplace, more than
half of the fabricators polled (53%) said that increased competition from new
stone fabricators had a direct, negative impact on their business during 2009.
Moreover, those reporting an impact reported high losses that they felt were
due to new competition: 35% said they lost between 6 and 10 % of business; 24%
said they lost 11 to 20% of business; and 16% said they lost more than 20% of
Consistent with Stone World fabricator surveys conducted in the past, participants
in this most recent study were relatively small in size. A total of 38% of
respondents had one to five employees; 21% had six to 10 employees; 24% had 11
to 25 employees; and 17% had more than 25 employees.
Looking at the experience of the fabricators polled, the market survey drew
responses from industry veterans as well as companies that are relatively new
to the trade. A total of 29% said they were in business for more than 20 years;
27% have 10 to 19 years experience; 24% have five to nine years of experience;
and 20% have been in business less than five years.
Also of note, most fabricators (73%) reported that they are fabricating both
natural stone and quartz surfacing products.