As reported in Issue: FCW Global July 2016, Posted Date: 7/21/2016; Author(s): Catalina Research:

In recent years, carpet and area rugs have been losing share to ceramic tile, hardwood flooring, and luxury vinyl tile. Manufacturers of these products have stimulated demand among consumers and commercial users by introducing innovative products such as easy to install engineered wood floors, click-installed luxury vinyl tile and wood-plank porcelain tile. U.S. and foreign-based manufacturers are also expanding capacity to produce these products domestically. This was especially true in the luxury vinyl tile market, which saw U.S. dollar sales increase by an estimated 26.7 percent in 2015.

Despite efforts by domestic- and foreign-based manufacturers to move capacity to the United States, imports continued to take share from U.S.-made flooring. In 2015, imports accounted for an estimated 34.4 percent of total dollar sales. This is up from 33.6 percent in 2014 and 32.4 percent in 2013. Foreign-sourced products continue to make inroads in the U.S. flooring market since they remain price-competitive. Price-competitive products are primarily sourced from Chinese manufacturers. In 2015, Chinese-produced flooring accounted for 41.3 percent of total dollar imports and an estimated 14.2 percent of total U.S. sales. This is up from 39.6 percent and 12.8 percent, respectively, in 2013.

Whether the products are made in the United States or sourced from non-U.S. manufacturers, U.S. floor coverings sales could strengthen somewhat during 2016. Stronger increases are seen in the residential replacement market. This trend began in the fourth quarter of 2015. Residential replacement sales are benefiting from steady increases in employment and personal income, stable mortgage rates, and sharper increases in existing home sales. Builder purchases could strengthen during 2016 due to strong increases in larger, single-family home starts as multi-family housing construction flattens out. Commercial sales continue to increase at relatively strong rates since private nonresidential building construction spending continues to increase at double-digit rates. As a result of these trends, U.S. floor coverings sales are estimated to increase by 4.5 percent in dollars and 2.7 percent in square feet during 2016.