Of those who responded to the Stone World survey, which was sent primarily to stone fabricators, 77.9% expected the stone market to increase in 2005. Almost all of the remaining respondents (21.1%) predicted that business would hold steady this year, with a small fraction (0.9%) predicting a decline.
And not only are fabricators predicting growth in 2005, but they also feel that the increase in business will be fairly significant. The vast majority of those predicting business to increate this year (86.3%) state the growth will be greater than 10%, and almost half of the respondents (47.7%) feel that the rise will be greater than 15%.
They are a variety of reasons being cited for the increased business in 2005, with the growing affordability of stone for residential countertops at the forefront. More and more fabricators are stating that natural stone has become a cost-effective option when compared to man-made counter surfaces. Additionally, respondents cited market trends, more educated consumers and a boom in construction and remodeling, as reasons for continuing success.
â€œThere are more home show programs on television that focus on stone and introduce [consumers] to new prospects,â€ stated one respondent. While another stated an â€œupsurge in business in late 2004â€ as reason for optimism.
Long-term growthPerhaps even more important than the short-term success, fabricators are also predicting solid growth for the industry over the next five to 10 years. A total of 83.1% feel that the stone market will increase over the course of the next decade, with 14.5% predicting that the market will remain unchanged and 2.4% calling for a decline.
And these market increases are expected to be substantial. Of those predicting long-term growth of the stone industry, 50.7% feel that the increase will be more than 20%, and a portion of respondents (32.1%) expect even greater growth, as they are forecasting a market increase of 30% or more.
When asked about the long-term optimism, respondents hold high hopes on the â€œcurrent economic forecast,â€ â€œbaby boomers retiring,â€ and â€œcontinued strength in housing and stone.â€
For the 2.4% who expect the market to decline in the next 5 to 10 years, they cite market saturation, saying: â€œit can't stay like this foreverâ€ as basis for their beliefs. Also, 37.2% of respondents stated that the devaluation of the U.S. dollar against the Euro had a negative impact on their business.
Results for 2004Moving beyond speculation and market trends, the optimism for the future of the stone industry can also be explained by its recent history. When polled about their own firm's performance over the past year, companies reported that growth was solid in 2004, with 78.4% of fabricators reporting increased sales in 2004. Of the remaining respondents, 17.6% saw business hold steady, and only 4.0% noted a decrease in 2004.
Moreover, the growth in business for stone fabricators last year was significant. The vast majority of companies with increased business (89.3%) saw a rise of more than 5%, and 65.3% saw their business increase by a factor of over 15%.
Future investmentsWith solid prospects for 2005 and beyond, fabricators are planning to invest more into their businesses over the course of the coming year. A total of 78.1% of fabricators polled said they will increase their investments in equipment in 2005, and a significant number will also be upgrading their overall fabricating facilities (47.0%). Also a sign of increasing business, many respondents (47.0%) also said they would invest more in personnel this year.
Reaching out directly to consumers, other major investments by fabricators will be made in marketing efforts (42.8%) and in showroom facilities (34.4%). And with increased sales in mind, 37.7% of respondents said they would be investing to increase their stock in 2005.
Overwhelmingly, equipment purchases by U.S. fabricators are being made to fabricate stone for the residential market, particularly granite countertops. A total of 86.9% were planning to invest in hand tools during the year. Other popular equipment investments included polishers (39.2%), bridge saws (30.7%), shapecutting machines (22.6%) and cranes (17.1%). And following the usual trend, the work in American fabricating shops is geared almost entirely towards slab fabrication, with only a small percentage of respondents planning investment in blockcutters (3.5%) or gangsaws (1.0%).
Once again, the survey demographics show the participants to be well-established firms -- matching the standard of the industry. A total of 74.1% of companies polled have been in business for five years or more, with 54.1% having been established for10 years or more. But the good fortune of the stone industry and the opportunities for fabricators have also attracted some new firms, as 25.9% of respondents have been in business for one to four years.
(For figures and charts, please see the January 2005 issue of StoneWorld)