Optimism continues to spread
At the start of each year, Stone Worldshares its fabricator purchasing plan survey with our readers, which serves as a gauge to how business will fair during the coming year. In 2016, it seems spirits are high among many fabricators, and many have positive comments to offer about business in the New Year.
Most believe 2016 will be prosperous. In fact, a total of 86%, which is an increase of 5% from 2015, said they expect sales revenue to rise, while another 14% said it would remain the same. And the most encouraging sign was that not one respondent believes there will be a decline in sales revenue in 2016. We certainly haven’t heard that in recent years.
The full survey begins on page 60 of this issue, but I thought I’d share some of the high points.
• On average, the fabricators who expect an increase see their sales growing by 17%, which has also been the mean for the past two years.
• While the 2014 survey indicated 89% of those polled believe sales would increase over the next five to 10 years, 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 to 10 years, and 6% believe there will be no expansion.
• A total of 69% of respondents said 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.
• 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.
• 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.
As you can see, the statistics are pretty solid and are in favor of a good start to 2016. The numbers reinforce what our staff here at Stone World has been hearing when we talk to industry members when working on an article or attending a trade show. It seems that quite a few shops we have spoken with lately have either recently invested in new equipment, are in the process of a big purchase or are planning a full-on expansion of their facility — all a reflection of the good times ahead.