State of the Wood Flooring Industry 2018: On Solid Footing

Catalina Report: Wood Flooring Amid the Flooring Industry at Large

The following excerpts of data about the U.S. wood flooring market are from the 2017 Catalina Report. The full report can be purchased for $3,495 via www.catalinareports.com or by calling (562) 988-0853. Some of the key findings included:

Sales data

• The value of wood flooring sales (shipments minus exports plus imports) was estimated to increase by 5.7% to $3.8 billion during 2017. Square foot sales were estimated to reach 1.7 billion square feet, a 5.3% increase over 2016. Sales have recovered from a low of $1.5 billion and 803 million square feet in 2009.

• Wood flooring sales are being driven in part by price-competitive flooring. During 2017, wood flooring average manufacturer selling prices were 91.0% above average floor covering selling prices. In 2012, wood flooring prices were 123.0% above average selling prices. In 2002, they were 142.0%.

• During 2017, wood flooring is estimated to account for 15.1% of total U.S. floor coverings dollar sales. This is up from 12.2% in 2012 and 7.8% in 2002. On a square-foot basis, wood flooring could represent 7.9% of total floor coverings sales, up from 6.5% in 2012 and 3.1% in 2002. However, increased competition from ceramic tile and LVT with wood looks is causing wood flooring to lose share in the U.S. hard surface flooring market.

• During 2017, Catalina estimates that engineered wood flooring accounted for 54.0% of total wood flooring dollar manufacturer sales (shipments minus exports plus imports) and 57.0% of total square foot sales. This is up from 51.4% and 50.7%, respectively, a decade ago.

Building & remodeling

• The residential replacement market accounts for more than half of total dollar wood flooring sales. Wood flooring has nearly doubled its rate of penetration in the residential replacement market over the past decade. In 2016, wood flooring is estimated to have accounted for 16.0% of total homeowner floor covering purchases. This is up from 8.5% in 2007.

• Wood flooring penetration levels, however, are highest in the building market. In 2016, wood flooring is estimated to have accounted for 34.8% of total builder flooring purchases. This is up from 24.3% in 2007. Builders increased wood flooring penetration levels by targeting the higher-income buyers purchasing the larger, more expensive, open-plan single-family homes built today.

Catalina Report: U.S. Manufacturers

• U.S. manufacturers are estimated to account for 75.0% of the total supply (shipments plus imports) during 2017. This is up from 66.3% in 2012. U.S. manufacturers primarily took share from Chinese manufacturers, and, to a lesser extent, Brazilian producers.

• The top three competitors—Mohawk, Armstrong, and Shaw—together are estimated to have accounted for 39.4% of the total U.S. supply in 2016, down from 42.3% in 2012. Share was lost by Armstrong while Mohawk and Shaw increased their position in this market. Armstrong has lost considerable share over the past decade; the company's wood flooring sales declined by 42.0% over this period.

• Rising demand and lower levels of import competition resulted in higher profit margins for U.S. wood flooring manufacturers.

• Average gross plant profit margins are estimated to be 26.5% during 2017. This is up from 25.4% in 2016 and 24.6% in 2012. Domestic manufacturers were able to offset rising material costs by improving labor productivity via investment in new and more efficient equipment.

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How are you adapting to stay relevant in today's marketplace?

"We have adopted some higher end LVT lines."

"We are testing new products and listening to customers."

"Our main focus is on unfinished, so we continue to increase our knowledge of unfinished material and installation methods."

"Having a quality staff and plenty of product. We appreciate our customers. We use our website and consider all marketing and sales options, including the internet."

"We are making custom-made engineered prefinished flooring from locally sourced timber that can't be purchased from any other source!"

"Better quality. Higher styled. More engineered wide planks."

Catalina Report: U.S. Distributors

• Sales through distributors have increased despite the growth of the home center and value hard surface flooring chain channels: Between 2012 and 2017, U.S. wholesale wood flooring sales are estimated to have increased at an 11.1% compound annual rate to $5.9 billion. Despite stronger growth, the number of distributors selling wood flooring has remained flat over the past 15 years, while sales per distributor location have nearly doubled.

• Distributors' increasing importance is in line with the inroads made by foreign-sourced products; foreign-based manufacturers usually turn to distributors to assist them in developing a U.S. distribution network. Independent floor coverings stores have also been turning to distributors to source high-end specialty products that are not offered by their larger big box competitors.

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Catalina Report: Retailer sales

• In 2016, wood flooring retail sales were estimated to have reached $6.2 billion or 16.6% of total floor covering retail sales. This was up from a 13.7% share in 2012 and 9.6% in 2007.

• In 2016, 48.0% of total wood flooring retail sales were estimated to have been made at specialty floor coverings stores. This was higher than specialty floor coverings stores' 40.0% share of total floor coverings retail sales.

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Catalina Report: U.S. Contractors

• Wood flooring installation contractor revenues are estimated to have increased at a 12.5% compound annual rate between 2012 and 2017. Wood flooring installation contractor revenues are estimated to have been $6.2 billion in 2017.

• During 2017, wood flooring installation contractor revenues are estimated to account for 23.3% of total floor coverings installation work, up from 18.6% in 2012 and 17.1% in 2002.

• The average value per square foot of labor to install wood flooring is estimated to be $3.51 in 2017. This compares to about $0.81 a square foot for carpet and about $0.87 per square foot for resilient and laminate flooring. However, the cost of installing wood flooring on a square foot basis declined from 2007, while estimated to have increased for other flooring. This improved the competitive position of wood flooring, which further stimulated consumer demand.

Find more data: www.catalinareports.com