Overall, a combination of factors attribute to the positive market perception, including improvement in economy, rise in construction/remodeling and an increase in marketing activities. Additionally, several fabricators believe that the economy will rise in 2016 because it is an election year. “The housing bubble has eased in this area, and we are already seeing signs of growth; also it is an election year,” cited one fabricator who was surveyed.

Others reasons mentioned for an upswing in sales revenue were the greater demand due to the fact that stone and quartz are becoming more mainstream and there is an increase in the cost of alternative products. Moreover, one fabricator said they are targeting quartzite and another has begun doing more commercial work, which has led to bigger sales.

Skepticism about future growth

There were some fabricators who participated in the Stone World survey who were hesitant to say they expect the stone market to grow in the next five to 10 years. While the 2014 survey indicated 89% of those polled believe sales would increase over this period, only 78% polled this year say it will. The average sales revenue growth in the next five to 10 years is expected to be 17%. A total of 16% said the stone market will stay the same during the next five to10 years, and 6% believe there will be no expansion.

Among those who did express long-term optimism, there were a variety of explanations for why they believe the stone market will continue growing during the next five to 10 years. “I think 10% annually is a safe and achievable goal,” said one fabricator. “I do believe that the interest rates and presidential election will impact sales.”

“The housing market continues to grow; and stone pricing — especially exotic stones — has dropped, allowing more people into the market that may have been priced out of before,” said another.

• Some additional reasons for continued growth included:

• Increase in home sales

• A willingness among homeowners to spend money on stone countertops

• More affordable stone and competition to allow lower prices

• Home building demand

• Commercial development

Investing in technology

Similar to predictions for this past year, fabricators have intentions to make serious investments in equipment in 2016. A total of 69% of respondents said that they will be buying new machinery for their fabrication shop. This is an increase of 1% from last year.

By far, hand tools are likely to be the most popular equipment on the purchase plan in 2016 (59%), followed by material handling and transportation equipment (49%). A total of 27% of fabricators polled plan to invest in polishing machines, and 20% say they will be buying an air/water treatment system, bridge saw or waterjet technology. Only 12% of respondents said they do not have plans to purchase any equipment in the coming year.

Statistics show the average spending on hand tools in 2016 is expected to be $7,667, while responding companies anticipate investing $23,130 in material handling and transportation equipment.

While investing in personnel was a priority for many fabricators in 2015 (46%), it seems to be where a good portion of respondents (20%) will be making cuts in 2016. In addition to equipment, those who participated in the survey cited marketing (31%), stock (29%) and showroom (22%) as areas of investment in the upcoming year.

Reflecting on 2015

Though the majority of respondents expect their gross annual sales to increase from last year, expectation in 2016 is marginally lower compared to that seen in 2015. According to the survey, 72% of fabricators watched their business grow during 2014, while 67% reported expansion in 2015. A total of 20% said that business remained the same in 2015 — up 6% from 2014. It was a tie at 14% for fabricators who reported a decline in business in 2014 and 2015.

Roughly half of respondents’ companies (46%) gross annual sales were reported under $1 million last year. Participants in the Stone World survey who reported gross annual sales of more than $1 million dropped from 62% in 2014 to 55% in 2015. This broke down as 29% selling between $1 million and $3 million, 14% between $3 million and $5 million, and 12% selling more than $5 million.

When asked to compare overall industry business conditions today to those of a year ago, 63% said that conditions had improved, while 24% said they remained stable and 14% said they were worse.

For three consecutive years, about half of respondents indicated that increased competition has no impact on their business. This was reported by 55% of surveyed fabricators this year. Competition from low-end fabricators remains the greatest challenge for many fabricators (47%), while 39% cite smaller margins on current products and services as their biggest difficulty.

Over three-quarters of respondents fabricate both natural stone and quartz surfacing. This percentage jumped from 78% in 2014 to 88% in 2015.

The number of respondents implementing “green” practices in their fabrication process is still low. In fact, the percentage dropped from 43% in 2014 to 35% this past year. For those companies promoting sustainability in their sales and marketing efforts, they are primarily using recycled materials and offering them to their clientele.

Of those responding to the Stone Worldfabricator survey, 26% have five employees or less, 52% have a staff of six to 20 employees, 8% have 21 to 50 employees and 14% have more than 50. The majority of those polled (33%) have been in business between 11 and 20 years. The largest percentage of fabricators polled (43%) are located in the south, while 24% were from the Northeast, 20% from the Midwest and 14% from the West.