Published in September, 2019
1). A global economic slowdown is under way. It is beginning to affect new construction projects coming on the market and other activities affecting natural stone, but it is not yet the principal factor that is currently affecting the natural stone industry.
2). Big format porcelain is making serious inroads into market share of natural stone in applications such as decoration apart from countertops, especially in western Europe. In middle or low income countries, natural stone continues to be the preferred material.
3). Quartz remains very popular in USA. It also suits the American wholesalers and fabricators to promote quartz, because of several factors that make it more convenient to work with, which translates into higher profits for them. The new generation of porcelain has still not made serious inroads in the US market, but the companies manufacturing them are making huge efforts in marketing and logistics.
4). The overwhelming importance of China in the natural stone industry as a result of massive construction activity there over the last 3 decades, as a buyer of blocks from all over the world, and a supplier par excellence of processed stone everywhere, is now steadily dissipating. This phenomenon has been the most important factor affecting business prospects of hundreds of quarry owners whose sole or main market was China.
5). While hard statistics are very hard to obtain, current production of natural stone in 2019 is probably somewhat less than last year (continuation of a multi- year trend). In many countries there is clearly a industry shakeup taking place as workshops close down because of the inability to adapt, or not being able to make the transition to a new generation.
6). Investments are taking place in north Africa in the stone industry as governments in the region there have identified natural stone as an employment generating industry. The current surge in new investments in machinery etc. in EU countries like Portugal, Poland and other East/Central European is mostly due to availability of institutional subsidies, market dynamism there is not the only reason. Severe shortage of skilled labour in high income countries is leading to big investments by processing units and fabricators in advanced CNC and other machines that replace labour and provide enhanced productivity. South East Asia is also showing greater dynamism.
7). Greyish white remains the top colour preference all over the world. Colour preferences seems to be a trend that is now globalised. Quarries of grey-white sre opening all over the world. Dark colours are still, by and large, out of fashion. Wavy patterns too are in demand. Exotic stones continue to be considered 'premium' materials. Many consistent materials seem to have become commodities. Black remains very much in fashion.
8). Growing environmental concerns everywhere is making opening of new quarries more difficult almost everywhere in the world, obtaining environmental clearances from the authorities has become extremely difficult and time consuming.
9). The businessmen of the industry seems to have finally woken up to the reality that they are facing an existential threat in many applications as a result of the growing presence of new materials. It is finally beginning to sink in that reducing prices does not create a bigger market, or lead to higher sales.
10). A new business model for the natural stone industry in the context of the new reality has, however, still not emerged, and is not clearly evident. There is, however, greater consciousness of more emphasis on design, especially in Italy, still the thought and innovation leader. There are isolated attempts to enter the furniture industry, and to experiment with new textures and finishes. More companies are also now taking part in trade shows in interior design or which are geared towards architects.
Written by Anil Taneja for WONASA
September 2019
