Hardwood Floors February/March 2024

Market Matters (Continued)

This is a summary of the December 2023 Quarterly Market Monitor Report published by Market Insights LLC. NWFA members have exclusive access to the full report, which provides forecasts and analysis of economic, market, and industry conditions and trends affecting the North American flooring market. The report includes a historical and forecasted volume of dollar sales of total wood flooring (at mill sell price) per metro area and state. Separate reports are available for the United States and for Canada. The availability of the reports on a quarterly basis will provide NWFA members with current data that can help them develop business plans, prioritize inventory, and react to market conditions in a timely manner. NWFA members may download the full report by visiting nwfa.org.

Estimated growth in dollar value consumption by flooring product category for the year-to-date period ending September 30, 2023, versus the same period last year:

Basis for Estimate U.S. CALCULATED RESULTS - YTD 2023

Product Categories

YTD Calc. percent of change (2022-23)

Carpet & Rugs Ceramic Tile

-8.4% -9.7% -11.3% -14.4% -15.9%

Laminate Flooring Resilient Flooring

Wood Flooring

Total Flooring

-11.2%

*NOTES: Year-to-Date = September 30, 2023.

Sources: US ITC import & export reports, Federal Reserve Production, Index/ Carpet & Rugs, & Market Insights LLC research

• Disposable Personal Income (DPI) will continue to rise, but not at the inflation rate. DPI will not rise close to the rate of inflation until 2026. • Commercial market as measured by real non-residential investment in structures, a measure of the inflation-adjusted investment in total new non-residential construction, is rising and should continue to strengthen before weakening in 2025, and then rising again in 2026 through 2028. The 2025 slowdown is partly the result of weakening corporate. Expect all commercial construction building types to rise in the forecast period, led by education, health care, and lodging.

consumer consumption and home and non-residential construction and renovation. • Key economic indicators have fallen during the last five quarters, indicating that a significant downturn is likely in the next six months. • Fuel, transportation, and raw material prices remain high, all of which are boosting inflation. Further, the war in the Middle East could cause some oil-producing nations to cut production and exports. • More Americans than ever are working two or more jobs trying to make ends meet. • Undocumented immigrants and refugees entering the U.S. could expand welfare rolls and social costs, and raise government spending and debt. • The Ukraine war is threatening to grow into a broader and more dangerous conflict, absorbing increasing amounts of financial aid from the U.S. • Although unlikely based on experience and data available, a forced lockdown to thwart another COVID-19 or similar outbreak would shut down the economy and cause a major economic downturn or recession. The U.S. economy is facing a major slowdown, though less likely a recession, in 2024, should the economic variables worsen.

Factors threatening the U.S. economic situation include: • Inflation remains the most serious

threat to economic stability. Although currently declining, it could easily rise again, threatening the positive course of the U.S. economy. Continued high prices on consumer staples and energy and high interest rates will threaten

Santo Torcivia is president of Market Insights LLC in Reading, Pennsylvania. He can be reached at 610.927.2299 or storcivia@marketinsightsllc.com.

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