May 2017 Editor Letter State of the Industry Report

“Prosperity belongs to those who learn new things the fastest.” – Paul Zane Pilzer

Although June is the issue we have slated to more closely examine all the news, information, awards and products coming out of Coverings, we ARE managing to squeeze in a few tidbits from the show that really bear early exposure. For instance, check out the Tech Talk section which discusses the long-awaited  ANSI product and installation standards for gauged porcelain tile; the NTCA News section has information on awards and accolades presented during NTCA Awards Night at the show, which also happened to be our association’s 70th Anniversary celebration, and the news item on the Why Tile campaign launched at the show. Here, in this letter, we present the TCNA’s 201 Ceramic Tile Industry Update, in terms of consumption, outlook, exports and imports.

So, without further ado, here it is:

U.S. tile consumption overview:

Strengthened by steady growth in the housing and construction markets, the U.S. economy

continued to expand in 2016, helping lift the U.S. ceramic tile market to a seventh straight year

of growth.

According to the U.S. Department of Commerce, and the Tile Council of North America, U.S. ceramic tile consumption in 2016 was 2.90 billion sq. ft., up 5.8% vs. 2015 (2.74 billion sq. ft.). For perspective 2016 is the fourth highest level ever reached by the U.S. ceramic tile market, topped only by the pre-recession boom of 2004-2006, when consumption was more than three billion sq. ft. annually.

The following table shows U.S. tile shipments, imports, exports, and total consumption in thousands of sq. ft.

 

The chart below shows total U.S. consumption of ceramic tile (in sq. ft.) over the last decade.

 

Imports:

In 2016, 1.99 billion sq. ft. of ceramic tile arrived in the U.S., up 5.7% from 2015 (1.88 billion sq.

ft.).

Imports in 2016 made up 68.6% of U.S. tile consumption (in sq. ft.), down slightly from 68.7% the previous year.

According to the Department of Commerce, in 2016 China remained the largest exporter to the U.S. (in sq. ft.) with a 29.4% share of U.S. imports (in sq. ft.), followed by Mexico (23.4%) and Italy (19.4%). Spain and Turkey rounded out the top five with a 9.3% and 5.1% share of imports, respectively.

The five countries from which the most tiles were imported in 2016 based on sq. ft. were:

Italy remained the largest exporter to the U.S. on a dollar basis (including duty, freight, and insurance) in 2016, comprising 35.8% of U.S. imports. China was second with a 24.7% share, and Mexico was third with a 12.6% share.

The five countries from which the most tiles were imported in 2016 based on total U.S. $ value (including duty, freight, and insurance) were:

 

Total ValTotal Val2016/20152015/2014

Country2016 (in $)2015 (in $)% Change% Change

Italy751,114,262695,055,4358.1%9.5%

China518,147,970521,010,646-0.5%11.0%

Mexico265,221,959287,867,792-7.9%-4.3%

Spain245,640,675194,031,27326.6%20.1%

Turkey107,800.576  93,315,61113.1%19.5%

All Countries 2,099,383,040 2,006,173,353 4.6% 10.1%

 

The average values of tile1 from the five countries (based on sq. ft.) from which the most tiles were imported in 2016 were:

 

U.S. Shipments:

U.S. ceramic tile shipments in 2016 increased for the seventh consecutive year and were at an all-time high of 909.0 million sq. ft., up 6.0% from 2015.

In dollar value, domestic shipments (less exports) in 2016 were $1.35 billion, up 7.3% vs. 2015 ($1.26 billion). 2

 

Exports:

U.S. ceramic tile exports in 2016 were 36.2 million sq. ft., down 11.1% vs. 2015. The vast majority of these exports (in sq. ft.) were to our North American neighbors, Canada (62.8%) and Mexico (8.1%).3

 

Economic Highlights:

New Home Starts: New home starts rose for the seventh consecutive year and were at their highest point since 2007. The 1.17 million units started in 2016 represented a 4.9% increase from the previous year. Even so there is still a long way to go to reach the prerecession peak level of 2.07 million units set in 2005.4

New Single Family Home Sales: New single family home sales increased for the fifth consecutive year and were at a total of 563,000 units in 2016, up 12.2% vs. 2015.5

While this recent growth is encouraging as the U.S. continues to put the recent recession behind, new home sales were still down 56.1% from the all-time high level of 1.28 million unitsreached in 2005.

Foreclosures: Foreclosure filings, which are a key indicator of the U.S. housing market’s health, declined by 13.9% in 2016 to 933,000 units. This was the sixth consecutive year-over-year decline and the lowest annual foreclosure total since 2006.6

 

1 The average value is significantly affected by the mix of tiles imported, with different types of tiles impacting the average value, in addition to differences in pricing for the same types of tile.

2 Tile Council of North America

3 U.S. Dept. of Commerce

4 U.S. Census Bureau

5U.S. Census Bureau

6 RealtyTrac