Like most flooring products in 2023, tile declined in both sales and volume last year due to various factors— most significantly, the struggling housing market. 

When the dust settled, tile flooring experienced about an 8% decline in dollar sales in 2023 to $3.226 billion vs. $3.507 billion in 2022, according to Floor Covering News research. Flooring tile volume also found itself in the red in 2023, registering a 6% decline to 2.306 billion square feet. That is compared to 2.453 billion square feet in 2022 and 2.477 in 2021. 

The discrepancy between dollars and volume was due largely to minor deflation in price after several years of record highs, as well as excess inventory for many. Those record high prices, some say, peaked in 2022. As evidence, FCNews research showed a 14% increase in dollar sales from $3.077 in 2021 to $3.507 in 2022 while still experiencing a 1% decline in volume. That was when pricing jumped from its historic average of $1.20 per square foot to $1.43. In 2023, pricing dropped slightly to $1.40. 

While this is the tile category’s first dollar sales decline in years, it is still a 13.43% increase from 2020’s $2.844 billion when the category experienced its first decline since 2009 amid the Great Recession. What’s more, 2022’s $3.507 billion was a record high for the category, and the 2.442 billion square feet in volume was the third-highest total since 2006 when housing sales were at unprecedented levels. It’s not too unreasonable to expect a decline from powerhouse numbers, especially after the particularly hard shot the housing market took in 2023. 

Putting things into perspective, 10 years ago in 2013, FCNews research showed the ceramic market clocked in at $1.879 billion, which was up 15.8% from 2012’s $1.623 billion. It was the category’s fifth consecutive year of growth, which wouldn’t wane until 2020’s 5% decrease in dollar sales and 3.5% decrease in volume. In the last 10 years, that is a 71.7% increase in dollar sales. 

The category also kept its standing in 2023 as the third-largest sector in flooring, representing 12.8% of total dollar sales ($25.122 billion) in 2023. That’s not significantly changed from 2022’s 12.5% but is still up from 2021’s 11.5% share. The category’s share of total hard surface sales ($15.069 billion) was also largely unchanged, coming in at 21.4% versus 2022’s 21%. 

In terms of volume, ceramic garnered 13% of total square feet, or 2.306 billion square feet of the 17.727-billion-square-foot pie. It also grabbed 23.37% of total hard surface volume, which also includes resilient, wood and laminate. 

The majority of tile’s challenges in 2023 came from the sluggish housing market. Like the rest of the industry, the category was impacted by higher interest rates and slow housing starts and sales. 

According to the U.S. Census Bureau, total housing starts for 2023 were 1.41 million, a 9% decline from the 1.55 million total from 2022. Single-family new home starts in 2023 totaled 945,000, down 6% from the previous year. Multifamily starts in 2023 totaled 469,000, down 14.4% compared to the previous year. “The U.S. ceramic tile market contracted in 2023 as the U.S. housing market, with which it is closely linked, continued to struggle because of high mortgage rates, inflation and labor shortages,” Eric Astrachan, executive director of the Tile Council of North America (TCNA), told FCNews. 

Scott Maslowski, senior vice president of sales, Dal-Tile, agreed. “We look at [the residential market] in regard to two big buckets: new residential and residential remodeled—and both were drivers to the decline in 2023,” he said. 

On a positive note, total U.S. construction spending last year reached an all-time high of $1.98 trillion, up 7% from the prior year, according to the U.S. Census Bureau. 

Imports vs. domestic 

For the second year running after a 15-year high, U.S. ceramic tile imports experienced an 8.4% decline from the prior year to 2 billion square feet in 2023, according to TCNA. That’s back down to nearly 2020 levels when imports sat at 1.97 billion square feet. 

In terms of consumption, imports comprised 70.2% of 2023 U.S. tile sales by volume, down from 71.1% in 2022. India usurped Spain’s position as the largest exporter by volume to the U.S. with a 20.3% share of U.S. imports, followed by Spain (17.4%) and Mexico (16.7%). 

The five countries from which the most tiles were imported in 2023 based on volume were: India (42.6%); Spain -19.4%; Mexico -7.8%; Italy -20.5%; and Brazil -18.6%. 

In regard to India’s takeover, several U.S. manufacturers— representing over 90% of all U.S. ceramic tile manufacturing— filed anti-dumping and countervailing duty petitions with the federal government seeking the imposition of substantial tariffs on imports of ceramic tile from India to remedy unfairly low-priced imports that have injured domestic manufacturers and flooded the market with uncertified porcelain tiles. 

Specifically, the industry’s anti-dumping petition seeks the imposition of tariffs estimated between 408%-828%, in response to ongoing massive and widespread dumping. The countervailing duty petition seeks the imposition of additional tariffs to remedy the impact of numerous Indian government subsidies— subsidies that have further injured domestic manufacturers.

“American tile manufacturers have always welcomed fair competition from imports,” TCNA’s Astrachan said. “However, Indian tile producers enjoy substantial government subsidies, which in conjunction with selling excess capacity at dumped prices, has allowed them to flood the U.S. market. Over the last 10 years, sales of tile from India have increased from a mere 344,000 square feet in 2013 to nearly 405 million square feet by the end of 2023.” 

On the domestic side, U.S. suppliers shipped 847.3 million square feet domestically in 2023, down 4.7% from the previous year, according to TCNA. U.S. shipments’ share of total U.S. consumption was 29.8%, up from 28.9% the preceding year. Domestically produced tiles’ share remained higher than the shares of any individual country exporting to the U.S.; the next highest shares of total consumption by volume belonged to India (14.2%), Spain (12.2%) and Mexico (11.8%). 

U.S. FOB factory sales of domestic shipments in 2023 reached $1.5 billion, a 1.7% increase from the prior year, according to the TCNA. U.S. shipments accounted for 36.9% of total U.S. tile consumption by value, up from 33.4% in 2022. 

Interestingly, U.S. ceramic tile exports in 2023 were 51 million square feet, up 0.5% from the previous year and the highest total on record. The vast majority of these exports went to Canada (65.8%) and Mexico (19.7%). 

Commercial vs. residential 

The commercial and residential markets tend to mirror each other when it comes to the tile category. When residential is up, commercial is down and vice versa. In 2023, both sides of the business struggled—much of that, suppliers agreed, had to do with interest rates. 

However, the struggling housing market in 2023 left a bigger mark on the residential side of the business. While residential garnered about 60% of overall ceramic sales and held onto its lead over commercial, commercial gained ground from its previous 34% to around 40% in 2023—or $1.29 billion of the total $3.226 billion ceramic market, that’s vs. $1.2 billion in 2022. 

Ceramic’s share of the overall commercial market increased to nearly 18% in 2023 vs. 2022’s 16.3%. That’s up from 14.2% in 2021 and 14.8% in 2020. 

Putting that into perspective, 10 years ago in 2013, commercial represented 28.2% of tile market sales (not including Main Street)—that’s a nearly 42% increase over 10 years. In fact, over the past 10 years, the commercial tile market has built itself back up to 40% of the overall flooring market, which is where it landed in 2013 when ceramic experienced its greatest increase since the early 2000s. 

Suppliers agreed one of the factors influencing commercial’s measured success in 2023 was the commencement of projects that had been pushed back during the pandemic and were finally back on the docket. 

“The commercial market remained strong for most of the year,” Raj Shah, president, MSI, told FCNews. “The primary reason is that there is a lagging effect on commercial installs. Projects that were originally planned and funded earlier than 2023 was what was installed in 2023. We did see a decrease in overall bidding, which may mean that 2024 will see a slowdown in commercial.” 

The segments of the commercial market that helped spur that growth, suppliers agreed, included education, healthcare and hospitality. “Our K-12 market and healthcare are really our top two segments, followed up by the quick-service restaurant business—and we saw big gains there,” said Larry Browder, vice president of sales, Crossville. “Those segments have always been strong. The amount of bond money that’s come in the K-12 markets over the last few years has been very significant when you look across the United States. Districts are investing in their schools.” 

Browder added that commercial has also experienced LVT fatigue. “LVT, across all the sectors, we’re seeing end users and specifiers not only coming back to more natural products but also coming back to products that are going to stand the test of time.” 

Suppliers agreed that tile sales were also buoyed by the commercial market’s focus on sustainability and more natural products—more so than the residential market. 

Looking ahead 

There are several points of contention the tile category will have to deal with moving forward—the Federal Reserve’s decision on interest rate cuts being one of them. At the start of 2024, most analysts predicted about three reductions for the year; however, five months in and that hasn’t happened. Experts do agree one cut is still probable, but there will likely be a wait until the fall for a final decision. Considering how heavily impacted the tile category is by the housing market, it’s easy to say the category will be waiting with bated breath. 

At the same time, the tile category will also continue to contend with the ongoing labor shortage. Given tile’s need for expert installers—even artisans—the predicament has hit the category hard for years. 

“A shortage of qualified tile installers and tile factory workers continues to be a challenge,” TCNA’s Astrachan noted. “TCNA and the National Tile Contractors Association (NTCA) are assisting with an initiative to potentially develop TCAT programs that incorporate tile installation curricula. Furthermore, the University of Tennessee-Martin has expressed interest in working with TCNA and tile manufacturers to identify collaboration opportunities.” 

Challenges aside, suppliers say they are expecting better outcomes in 2024 compared to last year. “Overall demand is fueling the housing market and is only expected to remain steady (and grow) this year,” said Jim Parello, executive vice president of sales, Emser. “New builds, multifamily housing, remodels and major renovations are all expected to lead the way in the residential market as consumer spending increases. Specific to residential renovations, demand for adaptability features continues to grow and ceramic has proven to be an important material in a variety of related applications, due to its anti-slip, etc., features.” 

TCNA’s Astrachan concurred. “If the housing market can rebound this year as predicted, tile consumption would likely follow suit and experience a gain.” 

Dal-Tile’s Maslowski concurred. “We’re excited about what the future holds. We’re a firm believer that residential will continue to rebound as we work our way into ’24 and ’25. So we’re encouraged about the tile industry, where it is and where it’s going.” 

For suppliers like Crossville, it’s all about investing in the future of the tile business. “AHF Products, [which acquired Crossville last year,] is making significant investments in the Crossville business,” Crowder stated. “We believe coming into the last half of this year, going into ’25- 26, residential is going to be a significant growth driver within the category.”