By Alan Beaulieu
2020 promises to be an interesting year, with many changes in the economic landscape and, potentially, in the political realm. We will discuss what impact, if any, the presidential election will have on the flooring industry. More importantly, we will take an in-depth look at the consumer and the housing industry in order to determine what the flooring industry can expect in the year ahead. We will outline actions that industry participants should take in anticipation of the projected upswing in the economy.
There is a lot of good news to be had in the housing industry on a national level. Many homeowners were delighted to see the value of their homes rise. Homebuilders, on the other hand, saw decline in new construction in 2019. Existing home sales also declined, which can have a negative impact on remodeling and upgrades as fewer new owners move into existing homes. The good news is that the rate of growth in both new construction and in existing home sales is accelerating upward, with more rise ahead.
But, as they say, all real estate is local, and there are many factors impacting the flooring industry on the state level. Population growth and housing affordability are two key factors. Population growth is uneven throughout the country, with Illinois and West Virginia in sustained and acute population declines. It is hard to grow a flooring business where there are fewer people and businesses every year.
Wages are going up, which is good news for the consumer and for the flooring industry. But they are not rising fast enough in some states to keep pace with housing prices. Those states will not get the same level of increased activity that will be realized in the Southeast.
Together we will look at:
- The general condition of the US economy through the rest of 2020 and into the decade ahead
- Single- and Multi-Family Permits by state
- Trends in square footage
- Impact of the trade war
- Consumer purchasing
- Commercial construction
- Labor issues
- Mortgage rates
- Pricing and cost
There are clear steps that must be taken in 2020 and in the years ahead. We will discuss these in more detail at Domotex USA 2020. One action item to consider right now depends on your view of the future. What would you be doing today if you were convinced that the economy would be expanding for the next 24 months and that you would be busier and busier through that time period? Your answer tells you exactly what you should be doing now. Get ready for a better future by preparing your business today. I will show you how you can know for sure when we meet in February.