Stone Column

Stemming the tide

March 1, 2008
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OK, I finally admit it, the stone fabrication market is down. It is not “perceived to be down,” as I have repeatedly argued with my publisher; it is not “up and down.” It is simply “down.” Now, with that being said, the question I have is how far down, and how is this downward trend truly affecting fabricators in the marketplace? Are many shops in dire straits? How many layoffs are taking place? Is anyone buying machinery these days?

These questions were addressed recently by a very candid group of fabricators from around the country (page 74). Representing shops off all sizes and levels of automation, they offered the following insights:

• Business, in general, is down. Percentages cited were 5%, 10%, 12%, 14% and as much as 30% by one shop in Florida. However, some shops said business was steady, and some even reported growth. In fact, a number of shops said that 2008 has started off relatively strong.

• New construction is hurting badly (no surprise there), but remodels - especially high-end, custom work - have helped to make up for this loss. However, the declines in new construction have chased some fabricators from that market into the remodeling field, further crowding the playing field.

• The commercial and light commercial markets are solid, and do not appear to be affected at all.

• Some shops reported layoffs, while others said they let positions remain vacant by attrition. “We have done some layoffs,” said one fabricator. “Some were ‘trimming fat,’ but others we hated to see go.”

• The fabricators who took part in the discussion are generally not lowering their prices. With increases in the cost of fuel and stone, they felt it simply didn’t make good business sense. “There are far too many companies lowering prices to bring in more business (i.e. chasing the dollar),” stated one fabricator.

• Some shops had very specific rules to remain diverse, such as: “We have never allowed a single contractor to be more than 15% of our total revenue. As a result, we were not relying on volume from a few production homebuilders,” or “Homeowner remodels have always represented at least 50% of our business.”

• In terms of machinery investments, some shops are being cautious, while others are forging ahead to be prepared for long-term success. In just one example of this, one Florida fabricator - who has actually been seeing some growth in high-end remodels - is planning a major equipment purchase this spring that was put off a year ago. Another fabricator cited the continued need for automation so his shop wouldn’t be as dependent on labor.

So there’s the discussion in a nutshell, although the full article on page 74 includes much more in-depth insight from everyone who participated. Basically, the situation is this: Business is down, but fabricators with a solid business plan and quality workmanship are already digging in and riding it out by paying attention to the bottom line, investing wisely and diversifying their businesses when necessary. It didn’t really sound like anyone was “freaking out” to me, and neither should any of you. Just be willing to adapt to these changing times.

Michael Reis, Editor/Associate Publisher

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