Clearly, the U.S. stone fabrication sector is on the rebound, and it has been for a couple of years. However, it appears that optimism in the industry is at a level that hasn’t been this high since before the recession. A large majority of fabricators saw increased business in 2013, and they are planning significant investments in their business due to a positive short-term and long-term outlook. These are the results of a survey conducted by the Market Research Department at BNP Media (Stone World’sparent company), and it polled fabricators across the U.S., including large and small firms as well as relatively new and well-established companies.


Predictions for 2014

Speaking on the coming year, a total of 74% of fabricators said they expected sales revenue to increase. Another 22% said that it would stay the same, and only 2% are predicting business to decline in 2014.

Of the fabricators who expect growth this year, the majority are expecting significant gains. A total of 41% are calling for increases between 11% and 20%, and another 22% are expecting growth of more than 20%. Only 11% of those calling for an increase feel that it will be between 1% and 5%, and another 27% of fabricators expect growth between 6% and 10%.

When asked why they were optimistic for 2014, fabricators pointed improved economic conditions in the market as a whole and increases in new home construction in particular. “Interest rates are too good for customers not to build/purchase [homes],” stated one fabricator, while another cited “increased foot traffic in the showroom and increased building permits.”

Fabricators also cited growth on the commercial side. “Many businesses have been holding cash waiting to move,” said one respondent. “This money is starting to flow. Civic projects are starting to get approved.” Another stated: “New construction and commercial work is starting to pick up, and I foresee it only getting better as banks begin lending more and more.”

Consumer awareness of stone — fueled by the communication efforts made by fabricators — was also cited as a contributing factor. “This industry is doing a much better job of educating the consumer,” stated one fabricator. “This, coupled with the accessibility to data, brings us a much more savvy customer, who is more inclined to lean toward the better-value product.”

Long-term confidence

The fabricators who participated in the Stone World survey expressed even greater confidence over the next five to 10 years. The vast majority of fabricators (83%) predicted that the market for stone will increase over this time, with another 13% stating that it would remain stable. Only 4% predicted a decline.

Once again, those calling for an increase over the long term feel that growth will be noteworthy. A total of 32% of respondents are calling for increases between 11% and 20%, and another 26% are expecting growth of more than 20%.

When asked about the reasons for long-term optimism, fabricators again pointed to an improved overall economy and an increase in building and construction. “All manufacturing is ramping up in the U.S., providing jobs and money that is being circulated back into the system.”

A number of fabricators elaborated on the housing market as well. “Housing is cyclical; I believe we will have a few more years of subdued growth, followed hopefully by a period of more vigorous growth and demand,” stated one fabricator.

Survey respondents also said that the relative affordability of stone will make it a staple for future construction. “The price of granite slabs has steadily decreased in the past few years, making it more affordable for most homeowners in my area,” noted one respondent, with another stating, “Even the people without too much money think they should put in granite or quartz to bring up the value of their house.”

After withstanding a prolonged recession, some fabricators also noted that the industry has become wiser when it comes to expanding their business. “I think that careful re-growth of the industry is key; smart purchasing of material and machines with targeted advertising to builders and retail clients alike.”

Investments planned for 2014

Looking at planned investments for 2014, almost two-thirds of fabricators (65%) said they would be spending on equipment this year — a notable increase from last year’s figure of 51%, and it appears that some large-scale investments will be taking place.

Fabricators also said that they are planning investments in marketing (42%), personnel (34%), showrooms (30%) and stock (24%), along with improvements to their fabricating facilities (23%).

For fabricators purchasing equipment, investments for 2014 run the entire gamut from hand tools (53%) to polishing machines (24%), digital/electronic templating systems (15%), bridge saws (12%) and waterjet technology (11%).

On the most expensive end of the machinery spectrum, more than one in five fabricators polled (22%) said they would be investing in CNC stoneworking centers in 2014, and the mean spending planned for this technology came to $185,750.

With an eye on safety, 41% of fabricators said they would be investing in material handling and transportation equipment — spending a mean amount of $33,163 each — and 17% said they would be investing in air/water treatment systems.

Looking back at 2013

In addition to all of the other factors for optimism in 2014, many fabricators cited their success in 2013. The Stone Worldsurvey asked fabricators to compare their business levels from 2012 to 2013.

According to the survey, 68% of fabricators saw their business grow during 2013. A year earlier, this figure was just over half of respondents (53%). Another 21% said that sales held steady in 2013, and only 11% reported a decline. One year ago, 18% of fabricators said that business had declined for the year.

Also encouraging, the fabricators that said business increased said that the gains were significant. A total of 44% of fabricators said that growth was more than 11%, and another 32% cited growth of more than 20%.

Participants in the Stone World  survey saw relatively high volume for the stone fabrication sector. A total of 62% of respondents reported gross annual sales of more than $1 million. This broke down as 40% selling between $1 million and $3 million, 9% between $3 million and $5 million, and 13% selling more than $5 million.

When asked to compare overall industry business conditions today to those of 12 months ago, 67% said that conditions were better, 22% said they were about the same, and 11% said they were worse.

Speaking on the greatest challenges in today’s marketplace, the greatest percentage of fabricators cited competition from low-end fabricators (61%), followed by smaller margins (26%). Competition from alternative countertop materials, such as Corian, wood or concrete, were not cited as a major concern, as only 5% felt this was the greatest threat to their business.

The percentage of fabrication shops processing both natural stone and quartz surfacing remained pretty much the same at 79%, up 3% from the Stone Worldsurvey conducted in 2012.

Historically, respondents to theStone World fabricator survey were relatively small in size, and this year was no exception. A total of 25% of respondents had one to five employees; 46% had six to 20 employees; 19% had 21 to 50 employees; and 9% had more than 51 employees.

U.S. fabricators still slow to promote “Green Practices”

Even though the entire building industry is citing “Green” as an essential component of their work, it would appear that the stone fabrication sector is stagnant in embracing this trend. As part of this year’s Stone World fabricator survey, we asked whether companies were promoting “Green” or “sustainability/life-cycle” practices in their sales and marketing efforts. Only 42% said yes, up only 1% from last year and actually down 6% from 2011.

The fabricators that did say they are promoting “Green” cited a range of factors and practices that they promoted.

Inherent green qualities of natural stone

• “Promoting natural aspects of stone and the fact that the marble we fabricate has no negative environmental impact”

• “Reduction of pollutants over other materials — Formica, Corian, R.T.C.”

• “Pilot program company for the NSC 373 standard”

Promotion of recycling practices and scrap utilization

• “Selling regional products close to domestic quarry locations; maximizing stock utilization; goal of zero waste; final waste is crushed to aggregate”

• “We make our customers aware of our recycling efforts such as water and trash recycling, etc.”

• “Use all scraps in shop”

Use of countertop materials with recycled content

• “We buy American stone and quartz and consider the manmade materials with recycled content.”

• “We actively sell Icestone in our showroom with a prominent display

• “Offering Vetrazzo [by Polycor] and other green products”

• “We promote ECO products [by Cosentino]”