Monday, July 27, 2026 from Floor Covering Weekly

U.S. floor coverings manufacturer sales declined sharply in the first half of 2026 as consumers and businesses pulled back purchases as inflationary pressures intensified along with the Iranian war, according to Catalina’s latest quarterly report. The war caused economic uncertainties as gasoline prices soared and mortgage rates increased. Part of the first half decline also reflects efforts by manufacturers, distributors, and retailers to shrink inventories to avoid price weakness in the face of rising cost pressures. Inventories seemed to have leveled off since demand is estimated to have held up better than the decline in manufacturer sales.

Based on its analysis, Catalina estimates U.S. floor coverings manufacturer sales (domestic factory shipments plus imports minus exports) could have declined 5.5 percent in dollars and 6.5 percent in square feet in the second quarter of 2026. This followed declines of 7.1 percent and 10.0 percent, respectively, in the first quarter.

Declines were sharpest among suppliers of foreign-sourced products, indicating domestic manufacturers took share for the first time since 2023. Square foot floor coverings imports are estimated to have declined 13.8 percent in the first half of 2026 compared to only a 1.0 percent decrease in domestic plant square foot shipments. Imports declined sharply as rising tariff rates increased average import prices. Import prices increased, in part, by the 67.8 percent increase in tariffs paid over the first four months of 2026. Rising tariff rates contributed to an estimated 11.5 percent increase in average import prices from the first quarter of 2025 to the second quarter of 2026. Over the same period, average prices for domestically made flooring dropped by 6.5 percent. Domestic manufacturers also gained share since they rely more heavily on the higher end of the market, which has performed better. On the other hand, foreign-sourced products are more likely to rely on the slower growing lower end of the market.

Meanwhile, manufacturer sales declined for all floor coverings products in the first half, whether higher or lower end. Some of the better performing sectors were soft surface and wood flooring. Soft surface flooring benefited from offering some of the lowest cost flooring products installed, while wood flooring is receiving a boost from its growing preference among higher end households. The sharpest declines were in the ceramic and porcelain tile and stone flooring markets and in resilient flooring lines. These sectors experienced the sharpest decline in import shipments in the first half of 2026 indicating efforts to reduce inventories were strongest among foreign-based suppliers.

In any case, customer purchases seemed to have held up better than manufacturer sales. The important residential replacement market seems to have bottomed out since existing home sales, the driver of household floor coverings purchases, have stabilized over the past year as mortgage rates trended downward. Mortgage rates remain below 2025 levels despite the Iranian war. In recent months, however, rising rates caused a sharp drop in mortgage applications putting a damper on the spring housing market. Commercial purchases also weakened slower than the decline in manufacturer sales. The commercial market is estimated to have declined by some 3.0 percent in the first half of 2026 based on a similar drop in non-residential building construction spending. Catalina estimates the builder market is the weakest reflecting a double-digit drop in new housing completions in the first half of 2026.

The sharp first half sales decline is expected to result in the fourth consecutive year of declining manufacturer floor covering sales. The decline, however, is estimated to moderate in the second half of 2026. Gasoline prices declined when the fighting in Iran subsided. Lower gasoline prices improved consumer sentiment, and mortgage applications rose. Declining inventory levels could also slow the drop on manufacturer orders. If these trends continue into the second half the outlook for floor coverings manufacturer sales and consumer and business purchases could brighten.

For more information contact Stuart Hirschhorn at [email protected] or CatalinaReports.com