At the beginning of the year experts predicted new housing starts as high as 1.5 million, giving support to the builder´s confidence levels. The entire indexes rose in January and the latter part of 2014 indicating growth. Consumer confidence was also high due to low interest rates for homes in the low 4% range on fixed 30 year mortgages, inflation low, and unemployment at 5.6%. At the end of 2014 single-family home starts showed a gain for the year of 4.6%. Median home prices rose last year 3% and nationwide home prices were back to 2007 levels. The overall housing starts for 2014 ended around 1 million up about 9% from previous year.
By Jeffrey Matthews
Thus the consensus was the countertop market would increase in 2015 as it did in 2014. The final GDP for 2014 was 2.4 percent supported by increased consumer spending up 4.3% annually and the strongest growth since 2006 and a promise of more capital investment in businesses for 2015. The GDP growth predicted for 2015 was even stronger with Federal Reserve predicting 3.1%. Sales of existing homes to increase by average of 3.5% while sale prices of homes was predicted to increase again during 2015 by over 4.4 %. Commercial building was projected this year to increase by about between 6 to 8%.
The countertop market in general has been increasing in sales by an average yearly of 5.1%, with the strongest growth predicted yearly in natural stone by 7.6%. The total countertop market in all products is about U.S. $20 Billion or about 675 million Square Feet (62.7 billion) with over 50% being laminate tops. Granite prices have dropped thus making it more affordable than the man-made quartz or engineered products.
The problem with growth is how it affects quality labor which is lacking in expertise and even the commercial market is predicting a shortage by 2017 of over 2 million workers to fill the needs of the trained demand for labor. Quartzite demand from China is increasing. The most demanded colors from the USA are whites and black, especially the white granites and marbles.
Revising the forecast now that it is July 2015, the construction should grow at 5% during 2015 rather than the 6 to 8% projected before. Commercial construction is planned to grow at 13% this year and then slow down to 7% during 2016. Office construction will be up 11% this year but again slower than the 19% originally predicted last January for 2015. The FMI predicts residential to grow this year now at 8%, and manufacturing construction to be up 17% this year as of now.
Natural Stone is still in strong demand and growing with increases in demand for marble tops such as white marble and the industry in general for construction is seeing increased demand for marble rising.
The Federal Reserve is talking of increasing interest rates and it remains to be seen how this affects or to what degree, the construction and housing markets, and if it tightens the pockets of investors.