Up until a few years ago, I used to love reading this survey -- as it confirmed the incredible growth we were seeing in the fabrication sector. Pretty much everyone said they were growing at a significant rate, and shop owners proudly revealed their plans for major investments in machinery, stock, personnel, showrooms and other improvements. More importantly, as the year went on, they followed through on these plans -- sometimes even exceeding their initial investment plans. These developments provided excellent opportunities for me as a reporter, because I knew there would be plenty of options for covering these new developments over the year. Every time I traveled somewhere for a trade show or other industry events, I made sure I visited a couple of fabrication shops in the area to see those gleaming new CNCs, bridge saws, polishers and other machines.
Of course, as we all know, the last few years have not been nearly as positive. As a result, I got to do a different type of reporting on our industry -- and it wasn't nearly as exciting. The fabricators we polled over the past couple of years reported conditions that were even worse than expected, and they were reporting significant declines in business, layoffs and a generally gloomy outlook for the future. Naturally, investment plans ground to a screeching halt, so I spent much of my time trying to extract any positives out of an industry suffering through its worst decline in decades.
So when I received the latest Fabricator Market Forecast from the Market Research Department at BNP Media (Stone World's parent company), I really wasn't sure what to expect. To be honest, I am tired of reading these gloomy reports -- and I am even more tired of reporting on them.
However, I was pleased to see that the fabricators we recently polled were more positive than they have been in years. While the full report can be found in the "Industry Issue of the Month" section of this E-Newsletter, the following is a brief summary of the results:
- 53% of fabricators polled said the stone market will increase in 2011; 37.4% said it would stay the same; only 9.6% said there would be further declines. This is a fair bit more optimistic than last year, when only 45% expected growth, and 15% expected further declines.
- Looking five to 10 years down the road, 84.3% said the stone market will increase. Another 13% said it would stay the same, and only 2.6% said it would decline. These numbers are slightly better than last year, when 6% expected a long-term decline.
- More than half of the respondents (52.2%) said that they would be investing in equipment in 2011.
Specific investment plans included the following:
- 13% of respondents said they would buy a CNC in 2011 -- with a mean value of $200,000
- 28.7% said they would be investing in material handling equipment (mean value = $20,000)
- 18.3% said they would be investing in polishers (mean value = $30,700)
- 10% said they would be buying bridge saws (mean value = $152,000)
- 12.2% said they would be investing in air/water treatment (mean value = $18,000)
- 10.4% said they would be investing in digital/electronic templating (mean value = $20,800)
The fabricators who participated in the Stone World survey gave a range of reasons for their optimism -- from general improvement of the economy to increased remodeling work -- and their specific comments can be found in the full-length report. Also of note, they pointed to specific improvement last year. According to the survey, 30.4% of fabricators saw their business improve during 2010, and another 33.0% said that business held steady. For comparison, only 19% of those polled at the end of 2009 said that business had increased for the year.
Of course, the results of this survey matter a lot more if the fabricators actually follow through on these investments. I ran the results past some veteran fabricators, and for the most part, they agreed that the sector is on the road to recovery, and that investments will indeed be taking place this year. "We expect a stronger natural stone market in 2011. A capital expenditure budget/plan is in place for a new production (polishing) machine," said Dan Riccolo of Morris Granite in Morris, IL. "We will continue to add to inventory, thus more material handling gear also."
Look, I know I'm not going to be reporting on the glory days of 2006 this coming year, but it looks like there will be investments to cover this year, and we look forward to bringing them to you in the print and online editions of Stone World.