Future Forecast

Future Forecast

Friday, June 7, 2024, from Floor Covering Weekly

By Janet Herlihy

Philadelphia layers cross hatching over a subtle geometric pattern for interest and depth in its Vantage carpet tile, a multi-level pattern loop in 100 percent Pivotal solution dyed fiber.
Commercial carpet tile sees partly sunny skies

Carpet tile is a growing segment for the soft surface flooring market, according to Catalina Research in its Floor Coverings Industry Quarterly Update released in March. Catalina estimated that carpet tile sales could have increased by 8.5 percent in dollars and 5.9 percent in square feet in 2023. “The sales increase reflects relatively strong nonresidential building construction spending since carpet tiles are generally used in commercial applications. Carpet tile sales are expected to continue to increase during 2024 since nonresidential building construction spending remains strong in early 2024,” reported Catalina.

Slow Start

Despite Catalina’s forecast, most suppliers FCW spoke to agreed that the total commercial flooring market is performing down to flat in the first four months of 2024.

So far in 2024, the commercial flooring market is down slightly compared to last year, but has performed better than predicted, reported James Lesslie, COO of Engineered Floors.

Shaw is expecting improvement. “In terms of soft surface, this year was off to a slower start, but our order rate is really strong,” said Jeff West, vice president of commercial marketing for Shaw Industries.

The market as a whole was down by 10 percent last year, reported Brian Ostrow, Bentley’s vice president of sales. “January 2024 was a slow start for us, but our orders have recovered, and we are optimistic about the rest of the year,” Ostrow stated.

Specifically in soft surface, the market is down, said Whitney LeGate, senior vice president of commercial product at Mannington Commercial. “We are hoping for a stronger finish through 2024. Flooring contractors have ample backlogs, but future business is less optimistic,” LeGate reported, adding, “Our soft surface business is fairing more favorable than the market to date this year.”

Tarkett North America was an exception. “We’re very encouraged by a strong first quarter across Tarkett’s soft surface portfolio, including Powerbond hybrid carpet and carpet tile,” explained Tracy Cook, senior director, soft surface product management for Tarkett.

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Star Segments

The Commercial market includes corporate, education, retail, hospitality, senior living, government, workplace and others. While that diversity demands a variety of products and presentations, it also usually means opportunities in one segment while demand might drop in another. For instance, “Education, government and retail/hospitality are better than the corporate office segment,” Lesslie explained.

Suppliers also cited education as a leading segment. “Education has been a strong segment for us,” advised Shaw’s West. “Growth there was primarily driven by the additional funding provided during the COVID-19 pandemic,” he explained.

Interface is also seeing strength in the education segment, especially within its K-12 business, driven by increased demand for its expanded Open Air carpet tile collection, which includes high-performance products at an attainable price, reported Jim Poppens, chief commercial officer at Interface.

Education and Corporate/Workplace represent the greatest share of Tarkett’s soft surface business. “These environments require flooring that is durable and easy to clean, while softening acoustics in collaborative spaces. In K-12 classrooms, where students spend a portion of their time directly on the floor, healthy materials are a must,” Cook stressed.

The corporate office segment continues to be volatile, but Interface’s renovation business remains strong as the trend of people returning to the office continues, observed Poppens.

Bentley is seeing corporate, public works and retail as bright spots primarily due to back-to-office mandates increasing, passed bonds and brick-and-mortar locations reassessing their retail footprint, Ostrow observed, adding, “We see the government/public works sector continue to grow along with hospitality.”

Workplace and senior living are doing well with carpet tile due to being heavily design driven, LeGate pointed out.

Cautious Optimism for 2024

“Business will remain slower than last year but should not decline dramatically from current levels,” Lesslie said.

Bentley is optimistic for the back half of the year. Ostrow explained, “Rates are stabilized for the time being and pent-up demand still exists. We do not see any major disruptions to the supply chain. Raw material costs decreased slightly in 2023 and have stabilized over the past few quarters. Bentley has a redundant supply of most of our major raw materials, additionally, pricing has stabilized, and we do not anticipate that to change in the near term.”

Shaw sees opportunity to innovate and create demand through design and sustainability. “At NeoCon, we are launching a new carpet tile collection on a bio-based backing, which reduces the carbon footprint of the product by about 40 percent. We’re also launching more high-design products at an accessible price point,” West said.

Carpet Tile Continues to Grow

Carpet tile now dominates the soft surface specified commercial market, according to Lesslie. “On a dollar basis, carpet tile represents approximately 80 percent of specified commercial’s soft surface sales.

And, “In the Mainstreet Market carpet tile is approximately 65 percent to 70 percent of the business on a dollar basis,” Lesslie observed.

Bentley’s Ostrow agreed, saying, “80 percent is tile, broadloom is growing, and area rugs are covering hard surface areas.”

Main Street

Philadelphia Commercial’s carpet tile business continues to grow, according to Tara Currier, marketing director at Philadelphia Commercial. “We expect it to continue with our three platforms: EcoWorx with nylon, StrataWorx with nylon and StrataWorx with Pivotal PET,” Currier said.

Despite a somewhat soft start, Aladdin is bullish on its Main Street business for 2024, according to Robb Meyer, vice president of Aladdin Commercial. “That’s based on activity and projects, especially in the builder multifamily market, where carpet tile is being used in club houses, apartments and corridors,” Meyer reported. “The dealer channel is also seeing growth in local education and local health care, where modular is doing well because of its design flexibility and ease of installation,” he explained.

Aladdin’s fiber diversity which offers ColorStrand Nylon, ColorStrand SD Nylon (solution dyed) and EnviroStrand provides choice to customers.