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TRANSCRIPT
K. SCHIPPER: Hi, I’m K. Schipper with the latest in hard surfaces industry news from Radio Stone Update.
0:34
U.S. kitchen-and-bath professionals are predicting a continuing slowdown of the market, according to the Kitchen & Bath Market Index – the KBMI – for this year’s third quarter.
The study, put together by the National Kitchen and Bath Association – the NKBA – still reflects a positive outlook on the market, but the results are showing less enthusiasm than earlier in the year.
The overall market index of 63.2 out of a possible 100 is the lowest since the third quarter of 2020, and down from a high of 82.3 in the first quarter of 2021. The future conditions rating of 55.4 remains well above the first quarter of 2020, when the index dropped to 19.8 at the start of the COVID pandemic, but it’s down more than 20 points from the first three months of this year.
The strongest segment in the survey is Building and Construction, which actually anticipates a slight increase during the fourth quarter of this year and is the strongest number of the segments reviewed. However, both Retail Sales and Manufacturing are down, with Manufacturing dropping from 64.4 last quarter to 51.7 in the latest study.
Both the overall and future-condition indexes are indicative of industry professionals’ predictions that the current economic slowdown will continue. KBMI ratings above 50 indicate industry growth, while ratings below 50 indicate slowing activity.
The third-quarter 2022 KBMI indicates only a 1.3 percent increase in full-year 2022 sales, versus full-year growth expectations of 9.4 percent only three months earlier. And this comes after two banner years of gains despite formidable obstacles.
Perhaps the most troubling is that fully three quarters of Building and Construction firms are reporting cancellations and postponements, up 29 percent from the first quarter of this year. Design firms also note the same trend, but not quite as extreme.
As a result of current trends, industry professionals are proactively adapting their business strategies. Design firms have altered materials and finishes used on projects, building and construction firms have limited estimates to 30 days, and retailers have scaled back orders from manufacturers.
Bill Darcy, NKBA CEO, says one lesson learned over the past two years is that adaptability is the key. He adds, “For instance, we see it with design firms currently leveraging new brands for better lead times and availability, as well as those who feel their businesses are well-prepared and positioned to meet the challenges of an economic slowdown.
The KBMI study is conducted jointly by the NKBA and John Burns Real Estate Consulting. Stone Update Publisher and Editor Emerson Schwartzkopf will offer his own take on the industry a little later in this podcast when he reviews September hard surface imports.
03:53
The National Tile Contractors’ Association – the NTCA – announces the 2022 winners of the NTCA Tile Setter Craftsperson of the Year awards. The awards are given annually in residential and commercial market segments. This year’s winners are Gabriel Cortez of Heritage Marble & Tile in Mill Valley, Calif., as residential tile setter of the year, and Triniti Vigil of J & R Tile Inc., in San Antonio, for the commercial award.
Cortez has been with Heritage Marble & Tile since 1998 and has become a key component in the growth of the company who mentors and trains up-and-coming tile setters. He also mentors young people at his church.
Vigil started with J & R Tile in 2007 and today is director of installation and training, although he still goes out on jobs and actively mentors younger employees. He is also known to educate the design community on the need for qualified labor. In his spare time, he’s a volunteer coordinator for the Westside San Antonio Chamber of Commerce, where he works to improve neighborhoods.
To be considered for these honors, nominees are required to have a minimum of 15 years of installation experience and still be setting tile today. They are evaluated on artistry, technical correctness, problem solving, continuing education, and mentoring or leading others. Cortez and Vigil will be honored at the NTCA Ambassadors’ reception at TISE in Las Vegas on Jan. 30.
5:32
Innovative companies looking to tap into the attendees of next year’s The International Surface Event, also known as TISE, will have the opportunity to exhibit in a free booth space in a dedicated pavilion at the show.
Dubbed the Startup Station, the area will be located in a high-profile spot in the exhibit hall. Six companies that have been in the market for less than two years will receive a complimentary turn-key booth and a marketing package to ensure maximum exposure at TISE. The goal is to have the show assist as a launch pad for industry exposure to their new product or service.
The International Surface Event has served for nearly 30 years as an industry marketplace for floor-covering, stone, and tile businesses to come together, seek products and service, and build relationships to develop their businesses.
Startup companies interested in this opportunity are urged to go to bit.ly/TISEstartup to apply. If you’re not yet registered to attend TISE, go to www.intlsurfaceevent.com. Next year’s TISE will be held Jan. 31-Feb. 2 at the Mandalay Bay Convention Center in Las Vegas.
6:47
A Word From Quantra
07:59
EMERSON SCHWARTZKOPF: This is Emerson Schwartzkopf. The 488.6 million dollars in total U.S. hard-surface import values for September is an 18% drop from August. Every major sector, save one, declined in the most-dramatic- swing of direction than during the lows of 2020’s pandemic spring.
Even the one sector that showed positive numbers — quartz slab – barely moved out of the red. September customs value only beat August by 1.1 percent, while the 21.9 million square feet shipped to the United States in September edged the previous month by an even-thinner margin of zero point seven percent.
Two of the sectors showing good strength this year – marble and the omnibus category of other stone – collapsed in September. Shipment volume for marble fell 21 percent from August, and other stone tumbled by 30 percent. Brazil, the largest supplier of other stone – mainly quartzite– slowed its shipment by nearly 50 percent.
Is this the slowdown finally taking shape? Well, the slump in shipments is across the board and isn’t limited to one particular sector or country. And, shipping bottlenecks are disappearing and rates dropping closer to pre-pandemic levels. Don’t count on an October surprise for trends to reverse direction again.
9:33
K. SCHIPPER: Manu and Rika Shah, founders of MS International Inc. – MSI – were honored Oct. 20 by the Resolution Project during a gala awards dinner in New York. The Shahs received the Champions Circle Award for Supporting Young Leaders.
The award is presented to leaders who, throughout their careers, distinguish themselves as champions for social change and advocates for entrepreneurship. The honor came during the eighth annual Geraldine Acuna Sunshine Young Leaders Now Award Dinner in Manhattan. The award recognizes inspiring young leaders who began successfully changing the world while still in school.
In addition to creating of thousands of jobs worldwide through MSI, the Shahs’ MSI Charitable Trust supports philanthropic endeavors like Resolution, which has allowed it to identify and propel dozens of young social entrepreneurs working on impactful social ventures across Sub-Saharan Africa.
George Tsiatis, Resolution Project CEO and co-founder, said the organization was thrilled to celebrate the Shahs’ contributions to their communities, to the impact sector and to the world. He added, “Mr. and Mrs. Shahs’ global philanthropy is an incredible feat of service and leadership. They are examples for our fellows and our community.”
In accepting the award, Manu Shah said, “Supporting the young leaders of today is the right intention for MSI Charitable Foundation and the right action for Resolution Project. I would like to thank Resolution… for motivating us to do more.”
In other news around the industry….
11:21
Caesarstone is celebrating its 35th anniversary in 2022, and to mark the occasion has decided to donate its quartz slabs to three local schools in Bryan County, Ga. Bryan County is the location of the Caesarstone manufacturing plant in the U.S.
The slabs, with a value of $800,000, have been donated to Carver Elementary, which is receiving 42 slabs as part of a renovation; the newly built Frances Meeks Elementary, which received three different colors of Caesarstone for its bathrooms, the main office and lunchroom; and 332 slabs will be part of the interior of the new Richmond Hill High School, which is currently under construction.
Ken Williams, president and CEO of Caesarstone The Americas notes that schools need materials that are easy to maintain, are non-toxic, nonporous and durable.
12:18
Also, in the spirit of giving, Kaeser Compressors, Inc., has raised more than $20,000 for the Breast Cancer Research Foundation through its Compressor for a Cure. The company auctioned off a special one-of-a-kind pink M59ME portable unit to the highest bidder in an auction that began Oct. 21 on National Mammogram Day and ran for 10 days.
A total of 25 bidders participated, and the winning bid of $21,700 was combined with donations from individual employees at Kaeser’s Fredericksburg, Va., facility, with 100 percent of the proceeds going to breast cancer research.
13:02
And, MS International Inc. – MSI – has again been named one of the fastest growing private companies in Orange County, Calif., as designated by the Orange County Business Journal. As a private, family-owned business, revenue has steadily increased company wide to a forecast $3 billion for 2022.
This increase comes predominantly from a rise in sales, employee growth, showroom and distribution center expansions, new product lines and other contributing factors. Headquartered in Orange, Calif., MSI employs more than 600 people at its headquarters and more than 3,000 employees throughout its 40 locations in the continental U.S., Canada and worldwide.
Look for the November/December issue of Stone Update Magazine soon at www.magazine.stonemag.com. For notes and a transcript of this podcast, go to www.radiostoneupdate.com.
For Radio Stone Update, I’m K. Schipper and we’ll see you here again soon.
