ISFA Releases 2017 Countertop Industry Outlook

Each year, the International Surface Fabricators Association (ISFA), conducts extensive research and analyzes a wide range of statistics to develop the Countertop Industry Outlook, and although the outlook does not specifically name sustainable surfaces, it provides some important indicators on this segment of the market.

Economic Outlook

The first set of data ISFA looks at to formulate the Industry Outlook concentrates on the general U.S. economy. The Congressional Budget Office reports that the gross domestic product (GDP) in 2016 increased by 1.6 percent, but this is down from the previous year when growth averaged at 2 percent. Economists believe the GDP will grow at 2.1 percent this year but will fall back to 1.9 percent in 2018.

Another general economic factor to consider is unemployment. However, not all sources agree as to what to expect this year. The Federal Reserve believes unemployment will drop from 4.8 percent to 4.5 percent while a leading research firm, Trading Economics, believes it will remain steady throughout the year.

The heated elections in 2016 cast a strong shadow of uncertainty on the construction industry, but according to Construction Outlook, the industry sentiment ranges from “cautiously optimistic” to “bullish.”

Housing Starts and Remodeling

As a whole, the housing market is far below its peak in 2006 even though it grew by 6 percent in 2016. The downside is that multi-family starts fell by 1.2 percent. When it comes to remodeling and home improvement, growth is also predicted, but there is some contention as to just how much.

The American Society of Interior Designers (ASID) states that an undersupply of homes for sale will elevate the renovation, remodeling and repair segments to their highest levels since the recession, but according to the Houzz State of the Industry study, growth in residential renovation will remain steady at 8.5 percent. Rounding out these predictions is the Joint Center for Housing Studies at Harvard University, which predicts home improvement spending to increase at a rate of 6.8 percent in 2017.

Cabinets and Countertops

According to ISFA, the outlook for kitchen cabinetry has slowed, but the industry remains optimistic. Growth slowed significantly in 2016 over the previous year after five years of much higher rates. Lower-end stock cabinets fell from 12.3 percent to 4 percent, and fully custom cabinets fell from 13.6 percent to 1.3 percent. However, mid-priced semi-custom cabinets rose from 4.2 percent to 5.9 percent, and it is this category that includes the vast majority of sustainable, or green, cabinets.

The outlook for countertops is spearheaded by the most recent “Countertops” study from The Freedonia Group, which makes market predictions extending out to 2024. According to this report, the demand for countertops as a whole will increase by 4.2 percent, an improvement of nearly 2 percent higher than the average growth between 2009 and 2014.

When it comes to countertop materials, natural stone, laminate and solid surface all surrendered market share in 2015 to engineered stone, commonly known as quartz. Other materials, however, are holding steady with a 12.4 percent share. Other materials, which include concrete, metals and recycled materials, are also predicted to grow at a much higher rate from 2014 to 2019 than the named categories:

• Laminates – 3.4 percent
• Natural stone – 5.3 percent
• Solid surface – 4.3 percent
• Engineered stone – 5.8 percent
• Cast polymers – 3.6 percent
• Tile – 2.6 percent
• Other – 10.1 percent

ISFA predicts, all in all, that 2017 will be a “fair year for market but with less robust growth than 2016.” Read the full 2017 Countertop Industry Outlook online here.