Hardwood Floors February/March 2026

Market Matters (Continued)

U.S. CALCULATED RESULTS – YTD 2025

-7.5% -6.6% 5.0% Ceramic Tile

-9.5% -19.6% 14.3% Laminate Flooring

Resilient Flooring

Wood Flooring

Total Flooring

-4.5% -4.0% 3.2% Carpet & Rugs

Market Channels

Estimated U.S. Production

-10.0%

-10.0%

-7.7% -4.9%

Exports Imports

3.2% 4.6%

6.1% 6.6%

5.7%

Total U.S. Market

-1.7%

-1.1%

-4.3%

-4.8%

-5.0%

-3.1%

Source: U.S. International Trade Commission Import and Export Reports, Federal Reserve Production Index / Carpet and Rugs, Tile Council of North America, and Market Insights LLC Research. Note: YTD = September 30, 2025.

• Real personal disposable income will grow at an inflation adjusted annual rate of 2 percent or greater through 2030, largely driven by moderate growth in skilled and technical worker employment increases and general wage growth. • Non-residential building construction will grow throughout the forecast period, especially for education, transportation facilities, health care, offices (mainly data centers, and professional offices), and institutional building types. Factors threatening the U.S. economy include: reduction agenda depends on Congress working together to put aside personal interest, reduce spending, and pass the required legislation. • Federal debt will exceed $37 trillion for the U.S. by the end of 2025. • Slowing employment growth, the result of government lay-offs and automation among domestic industries, if not offset by jobs created by firms on-shoring, new investments in domestic production, and consumer spending, will slow economic growth. • The unknown long-term effects of the imposition of tariffs on foreign imports is a major risk. • Other potential threats to the U.S. economy include a widening war in Ukraine or Middle East, new conflicts in Taiwan with China, the Persian Gulf, or other areas; a major domestic civil disturbance; another global pandemic; a major trade war threatening prices and logistical trains; a natural disaster requiring emergency aid; or other catastrophe. Santo Torcivia is president of Market Insights LLC in Reading, Pennsylvania. He can be reached at 610.927.2299 or storcivia@marketinsightsllc.com. • Inflation will continue to be an issue among key commodities for consumers. Much of the inflation

• The gross federal debt is very high currently at $37.3 trillion, up 37 percent from 2020, and 121 percent of GDP currently.

• An escalation of war in Ukraine, the war on drugs, or new global conflicts in the middle east or Europe could threaten the global economic stability. • A trade war instigated by a reaction to the newly instituted U.S. tariffs also would void the assumptions underlying this forecast. U.S. Real GDP growth will slow in 2025 and 2026 as growth is frustrated by uncertainty regarding the long- and short-term impact of the Trump Administration policies (tariffs, taxes, immigration, etc.). The scope of the stated policies of the new administration is so sweeping, if only partly implemented, they could have a major impact, either positive or negative on the U.S. economy. Key assumptions and issues effecting the U.S. economy: • Housing starts should average 1.37 million units annually (a mediocre rate) in 2025; still, single-family starts are growing, and this will continue to add some economic growth to the economy. • Residential home improvements will be stymied in 2025 as the uncertainty impact of the new federal policies slowly becomes clear. Spending is expected to recover slightly in 2026 before increasing at a moderate rate from 2027 onwards and throughout the remaining forecast period. • Consumer spending, although growing modestly, is slowing as many consumers’ finances are being stretched by inflation, high interest rates, and slowing employment growth. Still, the labor market remains resilient, and asset values are stable.

This is a summary of the December 2025 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.

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