Hardwood Floors October/November 2024

OCT/NOV 2024

2025

HUMIDIFICATION SYSTEMS DARK SPOTS IN RED OAK

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FEATURES

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Humidification Systems By Caitlyn Kampe

Humidification systems are essential in preserving wood floors by ensuring consistent moisture levels, which prevents common issues like warping, cracking, and gaps caused by fluctuations in humidity.

2025

ON THE COVER 42

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Dark Spots Mysteriously Appear in Red Oak (Again) By Todd Schutte

2025 Industry Outlook By Shannon Gayton

The fabled “black spots” that mysteriously can appear in red oak are finding their way back onto center stage, along with their partner in crime – the increasing trend of white or natural-finished floors.

The wood flooring industry is optimistic for growth in 2025, with more than 60 percent of respondents in our annual National Wood Flooring Association (NWFA) Industry Outlook survey expecting sales to increase.

PUBLISHING PARTNERS

CONTENTS

PUBLICATION ADVISORY COMMITTEE Robert McNamara | Chair, Sheoga Hardwood Flooring Jason Elquest | Blackhawk Floors Inc. Steve Brattin | Chair Michael Martin | CEO Anita Howard | COO Brett Miller | VP, Technical Standards & Training Stephanie Owen | Executive Director, NERF NWFA LEADERSHIP

Industry Insights

20 Government Affairs Election year politics.

By Dana Lee Cole

24 Sustainability Inaugural Flooring

By Anita Howard

Sustainability Summit.

Business Best Practices

Lenny Hall | Endurance Floor Company Inc. Kevin Mullany | Benchmark Wood Floors Inc. Jim Schumacher

28 Finance Midyear Outlook 2024: Still waiting for the turn. 34 Sales Savvy The path to sales

By LPL Financial

Libby White Johnston | Publisher | libby.johnston@nwfa.org Burt Bollinger | Editor | burt.bollinger@nwfa.org Brett Miller | Technical Editor | brett.miller@nwfa.org Rhonda M. May | Creative Manager | rhonda.may@nwfa.org Amy Burris | Digital Manager | amy.burris@nwfa.org Bridget Norlie | Engagement Manager | bridget.norlie@nwfa.org PUBLICATION TEAM

By Paul Reilly

professionalism. 38 Technology How to avoid

By Chad Ogden

bogus credit card fees.

14 Research Park Drive St. Charles, Missouri 63304 P : 800.422.4556 Local : 636.519.9663 F: 636.519.9664 E: news@hardwoodfloorsmag.com W: hardwoodfloorsmag.com

At the Site 72 Upcycling Wood floor manufacturing residuals.

By Libby White Johnston

76 Tech Talk At what point do squeaks need to be repaired? 78 Hardwood Hints Repairing a loose board. 80 WFOY Winner Spotlight Best Staircase:

CONTRIBUTING WRITERS Burt Bollinger Steve Brattin Dana Lee Cole Shannon Gayton Anita Howard

Paul Reilly Todd Schutte Steve Seabaugh

Libby White Johnston Caitlyn Kampe Michael Martin

By Steve Seabaugh

Brett Miller Chad Ogden

By Burt Bollinger

Walk On Wood Inc.

ADVERTISING SALES

Product Focus

82 Engineered Wood Flooring 86 Floor Manufacturing Equipment

Katie Schenk Advertising & Media Manager katie.schenk@nwfa.org | 636.736.5230

Also in this Issue

Hardwood Floors (Print: ISSN 0897-022X and Online: ISSN 2475-5125) is published on a bi-monthly basis, plus the Annual Industry Guide, by the National Wood Flooring Association and distributed as a membership benefit to its member companies and without charge upon request to qualified individuals throughout the wood flooring industry. Single copy price is $8, annual Industry Guide is $50. Subscriptions: $40/year (includes 6 issues and Industry Guide) in the U.S. and Canada. Publication office: 14 Research Park Drive, St. Charles, MO 63304. Phone: 800.422.4556. Printing office: Walsworth, 306 N. Kansas Ave., Marceline, MO 64658. Printed in the U.S. Periodicals postage is paid at Chesterfield, MO and at additional mailing offices. POSTMASTER: Send address changes to Hardwood Floors, P.O. Box 9147, Lowell, MA 01853. Copyright © 2024 by the National Wood Flooring Association. All rights reserved. Reproduction in whole or in part without written permission is strictly prohibited. Hardwood Floors' subscription base is AAM audited. An AAM audit provides advertisers and agencies with assurance that what they choose to invest in does, in fact, reach target audiences for specific ads. The AAM audit also helps media companies by documenting the quality of their audiences.

6 Chair’s Cut

By Steve Brattin

8 Business Briefs 12 Wood Stock

By Burt Bollinger and Libby White Johnston

90 New Products 92 Overheard on NWFA Podcasts 94 Wood Talk: Sean James 95 Ad Index

96 Final Coat: CEO’s Message

By Michael Martin

We’ve crafted the inventory of products you need.

With years of dedication and skill, you've mastered the art of flooring installation, honing your craft to perfection. We've meticulously crafted an inventory that includes premium hardwood flooring, high-performance sanders, robust flooring adhesives, durable finishes and more. Our selection is designed to ensure that every project you undertake is supported by the highest quality products, allowing your craftsmanship to shine through in every detail.

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CHAIR’S CUT PLANNING FOR

Steve Brattin Chair, NWFA

Success

It seems many NWFA members are thinking positively about 2025. More than 60 percent of respondents to the survey expect sales to increase next year. Other good news is more than 82 percent of NWFA members report they have been able to position real wood as a premium flooring option that demands a higher price. Read the full article about what the wood flooring industry is forecasting starting on page 42. If what others are predicting for next year doesn’t align perfectly with how you think things are going to go, you are not alone. Some survey respondents noted that they currently are seeing a slight softening in the market, though I think everything feels like a slowdown after the major boom we all experienced in the last few years. As I write this, the National Association of Home Builders’ Remodeling Market Index states that activity remains in positive territory. And the most recent Leading Indicator of Remodeling Activity shows that homeowner expenditures for improvements and repairs are expected to trend up through the first half of 2025. Now, I am not an economist, but adjusting your personal outlook on things can be helpful, especially if you have concerns about how next year may go. This goes beyond thinking positively. Personally, I believe in having a solid business plan and revisiting it to make adjustments regularly. A business plan is not just a stack of paper; it is a guide for your business strategy to help reach your goals. In the 2025 Industry Outlook, distributors, manufacturers, and retailers all included “improvements to operations” in their top three opportunities. Making that happen calls for a plan. If you have never written a business plan, don’t let it overwhelm you. There is more than one way to do it, and the plan does not have to be 100 pages long. The most important part is to get your blueprint down in writing. As I’ve mentioned in my column before, there will be a session focused on this type of planning during the NWFA’s Real Answers Small Business Workshop on October 11, 2024, in St. Louis. Anyone who is not able to join us for that should go listen to the series of NWFA Real Answers podcasts that Michael Martin and As we head into the fourth quarter of 2024, how are you feeling about your business? Now is the time to take a solid assessment of where you are in order to plan for next year. There is no better way to gauge if what you are experiencing is unique or if it is in line with the expectations of other wood flooring professionals than by reading the National Wood Flooring Association (NWFA) and Hardwood Floors magazine’s 2025 Industry Outlook.

PHOTO COURTESY OF NWFA

Chris Zizza have recorded leading up to the event, which include advice from experts on not only creating a business plan, but how to grow your business and increase profits, too. The Small Business Administration (SBA) is hosting training sessions on a variety of business topics during the workshop, and they have plenty of resources you can use outside of that. For example, the SBA’s website has an online learning center with a business planning tool explaining each section of a business plan and templates to get you started. Local assistance is even available through business mentors or counselors at a Small Business Development Center near you. Seize the opportunity to pinpoint how you can ensure your business starts off strong in January. Keep an optimistic outlook and together our industry can work toward exceeding expectations for 2025.

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BUSINESS BRIEFS

MANUFACTURER MEANDERINGS Akhurst Machinery Group has been selected as Marinus's exclusive distributor for North America. Marinus Machinebouw is a Dutch company that specializes in the development and production of machinery for the flooring and lumber industry. The HeartPine Company was recently featured on the “World’s Greatest” television series. Episode #369 showcases the company’s manufacturing process and aired on Bloomberg TV. Pioneer Millworks has been selected by the United States Environmental Protection Agency (EPA) for a grant that will provide funding to create Environmental Product Declarations for the company’s products.

Mereen-Johnson, a Minneapolis-based manufacturer of woodworking machinery and automation systems, has promoted Tony Sutton to president. Välinge Innovation has named Jim Cook its new business development manager for North America. Wintersteiger’s Woodtech division has doubled its footprint by relocating to a new Spring Hill, Tennessee facility. To support this growth, the company added Nathan Pigford as a sales and service technician, and Kevin Alambatin has taken on the service technician role.

Jim Cook

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Bona welcomes new team members

Bona ® has welcomed three new team members to the Bona Professional team: Vicky Jones as A&D commercial specification manager, Juan Martinez as adhesives sales manager for the Texas Region, and Erik Lundgren as a territory manager in Western Canada.

120th Anniversary Celebration Gutchess Lumber, a northern hardwood lumber manufacturer, is celebrating its 120th anniversary in 2024. The

fifth-generation family- and employee-owned organization serves New York, Pennsylvania, and beyond.

LEFT: The Gutchess Lumber Headquarters in Cortland, New York.

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Gary Sinise Foundation The National Wood Flooring Association (NWFA) has provided flooring for its 76th and 77th homes in support of the Gary Sinise Foundation R.I.S.E. program (Restoring Independence Supporting Empowerment). The R.I.S.E. program builds mortgage-free, custom, specially adapted smart homes for severely wounded veterans and first responders. The home dedication for U.S. Navy Petty Officer First Class (Ret.) John Kremer took place in Lebanon, Ohio. NWFA member Panel Town & Floors donated flooring and installation services for the project. The home dedication for U.S. Navy Petty Officer First Class (Ret.) Joshua Geddis took place in Coburg, Oregon. NWFA member Denver Hardwoods donated flooring for the project, and New Dimension Hardwood Floors provided installation services. To learn more about the program and how you and/or your company can get involved, contact the NWFA at 800.422.4556 or e-mail them at anita.howard@nwfa.org.

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BUSINESS BRIEFS

DISTRIBUTOR DOINGS The Belknap White Group, JJ Haines & Company, and Swiff-Train Company have unified under a new brand – UCX – the Ultimate Customer Experience.

RETAILER ROUNDUP Floor & Decor has opened new locations in Columbus, Georgia, and Deerfield, Illinois. America’s Floor Source (AFS) hosted a grand opening of their new headquarters in Columbus, Ohio. The company says the state of-the-art showroom was created to captivate

UCX has promoted Brian Green to the newly created position of chief sales and marketing officer – North America. In this role, Green will lead all sales, marketing, and product management efforts across the entire North American market, encompassing the Northeast, Mid-Atlantic, Southeast, and South-Central regions. Diamond W Flooring has been appointed a complete line distributor of all Hallmark products.

homeowners, builders, and designers with the latest innovations in flooring.

Brian Green

The North American Association of Floor Covering Distributors (NAFCD) has named Michael Wilbur as executive director. Michael Wilbur

CONTRACTOR CORNER

According to Angi’s Skilled Trades in America Report, 90 percent of tradespeople are satisfied with their careers. Pros cited finding meaning and value in their work, the overall compensation, and flexible work hours.

To be included in the Business Briefs section of Hardwood Floors magazine, please send your happenings to libby.johnston@nwfa.org. Get in the news!

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the magazine of the national wood flooring association

11

© 3M 202 4 . All rights reserved. Regalite is a trademark of 3M.

Wood Stock

2024 PARIS OLYMPICS JUNCKERS PROVIDES BASKETBALL COURTS FOR

By Libby White Johnston LeBron James, Steph Curry, Diana Taurasi, and more of the world’s best basketball players hit the hardwood at the 2024 Paris Olympics. But behind the scenes, it took another kind of “Dream Team” to have the sports floors ready for tip-off. Enter Junckers, a solid wood flooring manufacturer headquartered in Denmark, with local stock and offices in the United States.

Junckers was selected due to their long-term partnership with the International Basketball Federation (FIBA), for which they have served as the global supplier from 2021 to 2024. The company is no stranger to major tournaments, as they have provided the assist with flooring projects for the FIBA EuroBasket 2022, FIBA Basketball World Cup 2023, 2019 Lima Pan American Games, 2016 Rio Olympics, 2014 Asian Games, and the EuroLeague Final Four in Berlin. Thomas Bendixen, CEO of Junckers, says when compared to a standard sports floor at a school, the biggest difference with a marquee project like the Olympics lies in the timeframe and precision for installation.

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“The group stage was played in Lille (Pierre Mauroy Stadium), and as the tournament reached the playoffs, it took place in Paris (Bercy Arena) where the winner was decided,” explains Bendixen. “This distribution of events required a sports floor that is quick to install and dismantle, as well as strong project management to ensure everything ran

To help ensure a successful installation, both Thomas Bendixen, left, and Thomas Flindt, below, traveled to Paris. They brought along drawings of the court and a plan that included details such as where to place the benches for substitutions and television cameras.

smoothly. It was critical that everything worked perfectly.” The floors were manufactured in Junckers’ Denmark factory. According to Thomas Flindt, manager of product development/technical support for Junckers, the assembly, painting, and finishing took about three weeks. Preparations are not a buzzer beater, though; they began almost a year in advance. “The design is directed by the International Olympic Committee (IOC), reflecting the Olympics’ theme,” shares Flindt. “FIBA sets the performance requirements, needing a FIBA Level 1 approved floor. We actively participated as advisors in the project, influencing decisions based on our extensive knowledge and experience. This collaboration ensures the flooring meets all technical and aesthetic requirements, supporting both the athletes’ performance and the visual impact of the games.”

PHOTOS COURTESY OF JUNCKERS

Junckers, a solid wood flooring manufacturer headquartered in Denmark, with local stock and offices in the United States, was selected due to their long-term partnership with the International Basketball Federation (FIBA).

“In Paris, the Bercy Arena was transformed from gymnastics to basketball in 16 hours. Things must be timed just right to achieve that, because the whole arena was stripped down and there was a whole new setup with our floors, referee tables, logos – you name it.” — Thomas Flindt, manager of product development/technical support for Junckers

the magazine of the national wood flooring association

13

Wood Stock

Flindt takes us through the details of the flooring, adding that Junckers’ Pro Complete 44 system was ideal for the job since it is quick to install and dismantle, highly durable, and offers excellent shock absorption. “The floor is our Pro Complete 44 Portable Sports Floor system, consisting of 7/8” (22 mm) solid hardwood strips preassembled into lightweight, hand-carried panels,” he says. “For the tournament, the wood species was press-dried beech, which offers superior stability and resistance to wear. We provided two tournament floors and four warm-up courts, totaling just over 34,500 square feet. The finish used was Junckers

The floors were manufactured in Junckers’ Denmark factory. The assembly, painting, and finishing took about three weeks. Preparations are not a buzzer-beater, though; they began almost a year in advance.

HP800 Sport, a high-performance polyurethane lacquer approved and officially certified by FIBA.” To help ensure a successful installation, both Bendixen and Flindt traveled to Paris. They brought along drawings of the court and a plan that included details such as where to place the benches for substitutions and television cameras. “The organizers need to make sure the subfloors meet our requirements and specs, and then there’s the whole timing of it,” shares Flindt. “In Paris, the Bercy Arena was transformed from gymnastics to basketball in 16 hours. Things must be timed just right to achieve that, because the whole arena was stripped down and there was a whole new setup with our floors, referee tables, logos – you name it.” Junckers had a team of technicians onsite in Paris throughout the games in case any maintenance needs arose. Fortunately, Flindt says nothing came up and the floors performed exactly as they should.

“It was a fantastic experience seeing our floors receive such positive feedback and perform flawlessly,” he recalls. “The professionalism and dedication of everyone involved in the Paris Olympics created a supportive and upbeat atmosphere, even under pressure. During the night when we transformed the Bercy Arena, people were still positive and hardworking at 3:00 a.m.” As you might expect, the Olympic flooring ignited enthusiasm throughout the Junckers team while they worked to make this project a slam dunk. “Seeing the Olympic rings on our products evokes tremendous emotion. It makes you realize that this is more than a floor – it’s the stage for one of the most anticipated tournaments of the Olympics,” says Bendixen. “The finished product is not only a testament to our technical capabilities, but also reflects our commitment to excellence and our strategic focus on sports. Naturally, there’s a huge sense of pride associated with that.” A gold medal experience for all involved, including Team USA’s men’s and women’s basketball teams.

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Wood Stock

By Burt Bollinger FOREST TO FOYER FROM

“The homeowners had all this wood stacked up – 5,000 square feet of it – and they wanted to use it for their new home,” recalls Russell. “Heartpine is our specialty, but with its tight grain and the sap content, it is just a different kind of wood. That said, it’s my favorite to work with.” Unfortunately, working with wood that Russell didn’t procure himself came with its challenges. The heartpine had been milled roughly and required significant and unforeseen preparation before installation. “When I first saw the wood, I realized it was only roughly milled. Nothing was perfect at all,” Russell explains. “We had to go through it all, chop it, cut out the bad parts, and re-groove everything. It was a lot of work, but it was necessary to ensure the floor would turn out beautifully.” As the project progressed, the homeowners expressed their desire to incorporate large live edge slabs they had stored in their carport into the floor design. This idea led to the creation of a stunning basket weave pattern bordered by these live edge slabs.

Patrick Russell of All American Floor Sanding and Installation, based in Ocala, Florida, recently undertook a remarkable project that showcased the uniqueness of heartpine. Set in a newly built home, the project used pine harvested directly from the property on which the home stood. The wood, with its dense grain and tight patterns, presented a one-of a-kind opportunity for Russell to create a floor that was as personal as it was stunning.

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PHOTOS COURTESY OF PATRICK RUSSELL | ALL AMERICAN FLOOR SANDING AND INSTALLATION

THE FUTURE OF THE FLOORING INDUSTRY IS IN YOUR HANDS WHAT WILL YOU DO TO HELP?

“I had envisioned a basket weave pattern already because it’s one of my favorite floors,” says Russell. “There were no blueprints for what we were about to do, but we just went with it.” The installation process was a collaborative effort, with friends and colleagues lending a hand. Dave Marzalek of DM Hardwood Designs helped with the hand-scraping of the floors downstairs, which was necessary due to the sap content in the wood. “We tried to sand everything, but we knew we would not be able to get a foot downstairs without clogging the paper. It was just so sappy,” recalls Russell. “We could sand the upstairs flat, but everything downstairs had to be hand-scraped.”

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Wood Stock

“When I first saw the wood, I realized it was only roughly milled. Nothing was perfect at all. We had to go through it all, chop it, cut out the bad parts, and re-groove everything. It was a lot of work, but it was necessary to ensure the floor would turn out beautifully.” — Patrick Russell, All American Floor Sanding and Installation

The foyer, measuring around 250 square feet, became the project’s focal point. The intricate basket weave pattern was laid out carefully, with a starburst design in the center square and matching starburst patterns in each corner. “The very center square is actually a starburst pattern, and all of the corners were done this way too,” notes Russell. “The project also included the incorporation of crosses made from olive wood from Bethlehem. These crosses were embedded into the floor, adding a personal and meaningful touch to the design.” The installation process was not without its challenges, particularly when it came to fitting the soldier boards to the live edge slabs. Russell credits Justin Boone of Boone Flooring for helping to mill and saw pieces of the pattern, ensuring that everything fit together seamlessly. “We had to fit the soldier boards to the live edge slabs using a router,” explains Russell. “It was a lot of work, but the result was worth it.” The final steps included hand-scraping everything and applying a clear epoxy to the voids in the live edge slabs. “We sealed the floor using Zinsser, followed by two coats of Loba Hybrid with Amberizer, which had some tint added,” says Russell. “We waited a day, buffed it up, and hand-rubbed several areas. We then top-coated it with Loba Duo.” Russell also credits Pat Hodges, who assisted in finishing the scraping and laying the final touches. The entire foyer took about a week to complete, but the result was a breathtaking floor that the homeowners were thrilled with. “Every morning we worked, the homeowners would come in drinking their coffee, and you could feel the amazement,” reflects Russell. “This wood was so special to them as it had come off their property. They had

been stockpiling it for years before the house had even been built. They were so great to work with and so happy with our work. Everyone that comes in the house cannot believe it.” Russell advises others facing a similar project to inspect the material carefully before beginning. “When I walked in, I was walking in on someone else’s job, meaning I was not the one who had ordered this wood,” he says. “If you don’t know what mill it came from, you need to look it over before you agree to a price. We didn’t find many issues until we initially attempted installing it.” He also emphasizes the importance of ensuring that the tongue and groove pieces fit together correctly, especially when dealing with wood of different widths. In the end, the project was a success in terms of the craftsmanship and the personal connection the homeowners felt to their floor. “They were so happy with our work,” Russell says. “And that made all the hard work worth it.”

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GOVERNMENT AFFAIRS INDUSTRY INSIGHTS

ELECTION YEAR POLITICS

ADOBESTOCK ©

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By Dana Lee Cole

The top priority for legislators in the days they will spend in D.C. will be moving the appropriations bills that fund government operations. If they don’t get finalized before they expire in October, Congress will have to pass Continuing Resolutions (CRs) to keep government operations viable. Bills of this nature start in the House and move to the Senate for consideration before going on for presidential signature. It seems likely that the annual defense policy bill, the National Defense Authorization Act, will be acted on before the end of the year. Less likely, but still possible, is the reauthorization of the Farm Bill, which already has been extended for one year past its deadline. While a bipartisan House bill moved forward during the summer, the Senate still was working to come up with final language as they departed for the annual August recess, although both Senate Democrats and Republicans released their own frameworks and some initial language in July. It’s likely that both sides will wait for election results to see if waiting until the new Congress will help their chances of including partisan priorities in the final document. Moving a tax bill reinstating many of the provisions of the Trump era Tax Cuts and Jobs Act (TCJA) while boosting child tax credits seems unlikely in 2024, but key players including Senator Ron Wyden (D-OR) and Congressman Jason Smith (R-MO) continue to push forward. For those keeping a close eye on presidential campaign rhetoric, this is an important issue to track. What the candidates say about TCJA and business taxes in

The November elections are approaching rapidly, capping off the most tumultuous and unpredictable campaign cycles in memory. Predictions of who will win and who will be sent home are rampant, but the fact is, no one really knows for sure what the political landscape will look like after the dust clears in November. While most of the attention is focused on the election and what comes next, there is also significant interest in what, if anything, Washington will be able to accomplish in the few legislative days left on the calendar after voting has concluded.

Over the centuries, wood floors have stood the test of time and leave a rich heritage for future generations to come. Like the early craftsmen who built this country, we proudly make all of our products in the USA, where we help support our own American craftsmen, their families and communities. When it’s time to choose a floor that honors tradition but has timeless appeal and can last more than a lifetime, choose a solid hardwood floor from Maxwell Hardwood Flooring.

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Government Affairs (Continued) general could be a good indication of which policies they would pursue from the White House. For those operating outside the beltway, it is unfathomable why these issues cannot be resolved in a timely and orderly manner. If a business permit or license expires, you renew it. If there are bills to be paid, you cut the check. Unfortunately, while Congress is good at imposing rules for others to follow, they are very good at delaying action that is by most standards, essential. Why? First, it is important to remember that our system of government was not created to be quick. The three branches of government were created to slow things down, allow for dissenting opinion, and force policy debate. It works. The ever-growing tensions between the two main political parties act as a further drag on agreement and action. Most, if not all, of the action on the bills noted above will be delayed until the “lame duck” session; that period of time between the election and the swearing in of the new Congress and president. At that point, the table will be set for the next Congressional session, and current leaders will understand exactly what leverage they have at the end of 2024 as compared to early 2025. Both parties will strategize how they can best maximize their priorities…whether that means acting before Christmas or throwing up delays so that legislation can be dealt with in the new year.

The bottom line for the Hardwood Federation team is that we have to keep working both sides of the aisle to ensure that everyone understands OUR priorities… and try to get the best result from whatever the eventual election outcome may be. The only certainty of this, or any, election is that some faces will stay the same, but many will change, including those of the leadership. This is what makes the Hardwood Federation and our unified voice so important…having a recognized presence in D.C., and making sure Congress is hearing the same message from all of our association members and their company members under the Hardwood Federation banner makes our case for action stronger and louder. All elections are important, and the rise of social media has brought them into our lives to a degree never imagined. Candidates will be out in force this fall, on our screens, and in our communities. Look for talking points and helpful hints about how you can help spread the Hardwood Federation message for federal action that helps support our amazing industry. Dana Lee Cole is the executive director at the Hardwood Federation, a Washington, D.C.-based hardwood industry trade association that represents thousands of hardwood businesses in every state in the United States and acts as the industry advocacy voice on Capitol Hill. She can be reached at dana.cole@hardwoodfederation.com.

The bottom line for the Hardwood Federation team is that we have to keep working both sides of the aisle to ensure that everyone understands OUR priorities. The Hardwood Federation has a recognized presence in D.C., and making sure Congress is hearing the same message from all of our association members and their company members under the Hardwood Federation banner makes our case for action stronger and louder.

HAVE A UNIFIED VOICE

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SUSTAINABILITY INDUSTRY INSIGHTS

SUSTAINABILITY SUMMIT Inaugural Flooring Sustainability, green building, climate change, embodied carbon…these topics and more were the focus of the inaugural Flooring Sustainability Summit held July 16-18, in Washington, D.C. The event brought together more than 225 key stakeholders, including associations, manufacturers, designers, architects, advocacy groups, government officials, and more, to advance the narrative for flooring sustainability. The National Wood Flooring Association (NWFA) was a co-host for the summit, along with the Tile Council of North America (TCNA), Natural Stone Institute, and North American Laminate Flooring Association.

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By Anita Howard

Bill Griese, deputy executive director for TCNA and summit chairman, noted that the event was designed to bring together leaders from the entire flooring industry, put competition aside, and work collaboratively to identify sustainability objectives, prioritize industry standards, impact governmental policy, and advance green building practices throughout the supply chain. “Not all of us are material scientists,” stated Peter Templeton, president and CEO of the U.S. Green Building Council, “but we must be educated consumers.” Templeton, along with representatives from the American Institute of Architects, International Interior Design Association, and Green Building Initiative presented the keynote session.

John Forbes, director of manufacturer services for NWFA (center), participated on the panel for Health and Material Reporting.

PHOTO COURTESY OF NWFA

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Sustainability (Continued)

PHOTOS COURTESY OF NWFA

Bill Griese, deputy executive director for TCNA and summit chairman, addresses attendees at the Capitol Visitor Center.

In addition to these prominent groups, attendees participated in two full days of presentations from organizations that included the U.S. Environmental Protection Agency, ASTM International, International WELL Building Institute, U.S. General Services Administration, National Institute of Standards and Technology, Habitable, International Living Future Institute, Gensler (a large architectural firm), WAP Sustainability, Carbon Leadership Forum, U.S. Green Building Council, industry manufacturers, and industry trade associations. Following each presentation, attendees broke out into facilitated workshop groups to discuss topics in more detail. Topics included Alignment on Embodied Carbon, Green Building Standardization, Health and Material Reporting, EU Initiatives and Their Impact on Flooring, Architecture and Design Initiatives, and Federal Procurement. Two networking receptions were held as well, providing attendees with opportunities to make meaningful connections and establish relationships with sustainability experts from across the globe. Green building conferences generally focus on broad topics, but this summit is the first time sustainability leaders have met to discuss how flooring specifically fits into the broader sustainability narrative. “We know that real wood flooring has a great sustainability message and checks all the boxes from a green 26 hardwood floors hardwoodfloorsmag.com

building perspective,” says Michael Martin, president and CEO of NWFA, “but there is a big disconnect between consumers wanting environmentally friendly products and cost. All things being equal, consumers want products that do no environmental harm, but they also need products that fit their budget.” Educating consumers about environmental issues, as well as the long-term value of real wood

Dates for the 2025 Flooring Sustainability Summit are set for July 16-17 at the Mayflower Hotel in Washington, D.C. More information is available at FLOORINGSUMMIT.COM.

is a major objective for NWFA, which is why it is advocating for standardization for cradle-to grave environmental declarations as opposed to cradle-to-gate. “Wood has the best environmental story to tell,” says Martin, “and our industry needs consensus in how we tell that story so that consumers can make educated buying decisions.” John Forbes, director of manufacturer services for NWFA,

participated on the panel for Health and Material Reporting. Forbes shared information about the NWFA’s Environmental Product Declarations for solid and engineered wood flooring, the NWFA’s Engineered Refinishable Program, the NWFA’s Responsible Procurement Program, and the NWFA’s education opportunities, including hands-on training, online courses, and continuing education courses for architect and design professionals. “The caliber of attendee at this first-year event was truly impressive,” he stated. “I was able to have one-on-one conversations with leaders from the world’s largest architectural firms, designer groups, green building programs, and even government policy agencies. These relationships will help NWFA fine tune its future sustainability focus and messaging. We already are looking forward to next year’s event.”

Anita Howard is chief operating officer for the National Wood Flooring Association in St. Louis. She can be reached at anita.howard@nwfa.org.

FINANCE BUSINESS BEST PRACTICES

Still Waiting for the 2024 MIDYEAR OUTLOOK:

At the halfway point of 2024, a sense of persistence defined the economic and market landscape. Trends from late 2023 continued, with surprisingly resilient economic growth mixed with stubborn but decelerating inflation. Equity markets thrived in this better-than-expected environment, having regained all the lost ground from 2022, while the bond market continues to grapple with policy uncertainty and remains largely range-bound. Turn

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By LPL Financial

While it’s tempting to forecast a continuation of these trends, our analysis suggests an impending shift. The economy looks poised to cool down in the second half, while volatility is likely to rise off of multi-year lows. Each outcome will impact both policy and markets. Here are a few of our thoughts on the economy, the stock market, and bond markets.

THE ECONOMY: A TALE OF PROLONGED

market’s expectations of numerous Federal Reserve (Fed) rate cuts were overdone in our view because inflation was sticky, and consumers still had money to spend. As of now, the markets perhaps have swung to the other extreme, with some even chattering about potential rate hikes. Again, we believe this is misguided. As of the writing of our annual outlook late last year, we thought “the U.S. could experience…an economic contraction…but still outperform other markets.” One sizable miscalculation was the extent to which consumers, particularly wealthier ones, could drive the economic growth engine despite high prices. We Have a Delayed Landing, But Still a Landing – Recent data on refinancing activity provides a clue on why the economy has experienced a delayed landing. The housing market often explains a lot of what is happening in other sectors of the economy, and this time is no different. Roughly one-third of mortgages were refinanced in the quarters following the pandemic recession of 2020. Because of 2020’s extremely low mortgage rates, these homeowners lowered their monthly payments, increasing their disposable income. Other homeowners took advantage of healthy home equity and took cash out to support more spending. In addition to the oft-mentioned excess savings from stimulus and temporarily curtailed spending, improved household financial conditions from low mortgage rates kept the economy out of the doldrums.

RESILIENCE, BUT A DELAYED LANDING ON THE HORIZON A Brief Look Back – The midyear outlook is an opportunity to revisit the forecasts we outlined in December 2023. The views are the same in many ways, but with a bit more nuance. As we said last year, rate cuts “may not come until the latter half of 2024, and the magnitude may not be anywhere near as aggressive

as markets think.” Indeed, this is still the case. As last year came to a close, the

the magazine of the national wood flooring association

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Finance (Continued)

• A Measured Slowdown: As consumer spending and labor demand slow, a moderate economic slowdown should follow. • Contained Inflation: Core services inflation is expected to cool as labor costs decelerate, but the overall impact on consumer prices will take time. • Shifting Federal Reserve Policy: A higher unemployment rate, weaker growth, and contained inflation eventually will provide the Fed with a path to cut rates before the end of the year. THE STOCK MARKET: EARNINGS, VALUATIONS, AND VOLATILITY IN FOCUS Economic Growth Surprised in the First Half – As 2023 ended, recession risk was elevated, and the economy appeared to have little cushion if conditions deteriorated. Now, with the benefit of hindsight, we know the economy enjoyed plenty of cushion – cushion that it hasn’t needed. Stocks were not pricing in enough economic or profit growth. Gauging Upside Using Historical Market Patterns – Markets tend to move in cycles, as we discussed in Outlook 2024: A Turning Point, so we can use historical patterns to help form an opinion about where stocks might go in the second half of the year. We regularly say history doesn’t always repeat, but it often rhymes. The S&P 500 has gained 52.8 percent during the current bull market that began on October 12, 2022. It is short of the historical average gain for a two-year-old bull market at 60 percent. It’s right in line with the average if we exclude sharp rallies from the 2009 and 2020 lows (53 percent). Based solely on this analysis, stocks may not be able to deliver much additional upside in the second half of the year, although rising corporate profits and the growing trend in stock buybacks could enhance the backdrop for stocks. The stock market enjoyed a strong first half. Looking ahead: • Earnings Growth Will Be Key: The extent of stock market gains in the second half could be influenced by corporate profits continuing to exceed expectations.

BILLIONS IN TAPPED HOME EQUITY SPURRED SPENDING

As we look ahead, however, the domestic economy looks to be late cycle, and recent data suggests the consumer has started to slow down. We indeed expect the consumer will slow spending later this year as data from both the Conference Board and the University of Michigan revealed that most consumers have pivoted away from big-ticket buying plans. A definitive slowdown has proven elusive despite the late-cycle characteristics. This largely can be attributed to the following: • Surprising Spending Strength: Consumers, particularly wealthier ones, surprised us with their continued spending power despite high prices. • Varying Degrees of Interest Rate Sensitivity Across the Economy: The refinancing boom experienced during the COVID-19 pandemic has boosted disposable income and further amplified the economy’s resilience. Despite initial buoyancy, economic data has begun to show signs of deterioration, leading us to anticipate an economic downshift starting in the latter half of 2024. Investors should be prepared for: • Slower Consumer Spending: Consumers are shifting away from big-ticket purchases, likely leading to broader spending slowdowns. • Softer Labor Market: Recent data indicates labor demand is weakening. The unemployment rate, though historically low, is expected to rise in the last two quarters of the year.

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Finance (Continued)

CURRENT BULL MARKET APPROACHING ITS SECOND ANNIVERSARY

Sharp shifts in interest rate expectations have been a hallmark of the bond market during the last few years, but with volatility comes opportunity, and investors should consider: • Current Bond Yield Levels Offer Opportunity: Treasury yields are near their highest levels in decades, making fixed income an attractive asset class again. Investors can build diversified portfolios with high-quality bonds offering attractive returns. • Focus on Income: With rate cuts likely, a focus on income generation becomes more important for fixed income investors than price appreciation. Consider fixed income over cash. • Don’t Expect Big Moves in Longer-Term Yields: An inverted yield curve suggests limited potential for significant declines in longer-term bond yields. THE BOTTOM LINE We are an economy at a crossroads. The global economy is in a late-cycle transition characterized by slowing growth and the potential for increased volatility. This creates a complex environment for investors, requiring a more nuanced approach. Expect increased market fluctuations across assets in the latter half of 2024. This could be driven by factors like central bank policy changes, geopolitical tensions, and election uncertainty. Stay informed and actively monitor market developments. The LPL Financial Research team provided this information. LPL Financial is located in Chesterfield, Missouri. Contact Jonathan Benner, Certified Financial Planner™ with LPL Financial, at jonathan.benner@lpl.com or 636.200.4204. To view the complete Midyear Outlook 2024: Still Waiting for the Turn, visit lplmycfo.com.

• Valuations Are a Potential Headwind: Elevated valuations suggest most good news already is priced in and gains could be modest. • Volatility Expected: The move higher in stocks has been very steady. However, market corrections and pullbacks are a normal part of the cycle and should be anticipated, particularly as we get closer to the U.S. presidential election. • Be Patient: Consider a wait-and-see approach to add to equity exposure, potentially buying during market dips. THE BOND MARKET: “Boring” Bonds Deserve Another Look Don’t Forget About Income – While falling interest rates help provide price appreciation in this higher-for-longer environment, fixed income investors likely are better served by focusing on income opportunities, which has been the traditional goal of fixed income investors. Right now, investors can build a high-quality fixed-income portfolio of U.S. Treasury securities, AAA-rated Agency mortgage-backed securities (MBS), and short-maturity investment-grade corporates that can generate attractive income. For investors concerned about still higher yields, consider laddered portfolios and individual bonds held to maturity to take advantage of these higher yields. We think the current environment is ripe with income opportunities that, when combined with equities, can help reduce overall levels of portfolio volatility and position investors better for longer-term success.

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