Insights from InSight 2013: Vance Bell
InSight is Shaw Flooring ’s exclusive bi-annual event for members of the Shaw Flooring Network (SFN). Held this year at the Rosen Shingle Creek Resort in Orlando, Fla., Insight offers aligned flooring retailers sales, education, marketing and networking opportunities. In his opening address, company Chairman and CEO Vance Bell provided some insight of his own into the state of the company, the industry and the economic landscape at large. Here’s a sampling of what he had to say:
“I believe 2013 is going to be a better year for all of us. I’m certain you can sense the upturn, the opportunity, and the need to prepare for growth and success. It is so refreshing to stand in front of customers and say with certainty, for the first time in 5 years, that things are looking up and the future looks bright.”
“It’s been a long 5-6 years in a recession that has changed all of us. This Great Recession and its tremendous impact on our industry was driven by the housing bubble and the collapse of residential real estate. I’m not going to rehash the statistics of the housing crash; we all lived through it, and we know that it caused a decline in carpet and flooring units of more than 40%. Our industry was affected as much or more than any other industry in America.”
“I want to talk about what’s happening in housing today. Why? To give you the confidence that we will have an upturn that is both real and sustained. Of course, we’re all concerned about the politics and shenanigans in Washington; it is holding back our overall economy. But I really don’t think that will stall the housing recovery; it is more about demographics and pent-up demand. I want to make sure you understand housing’s dramatic effect on our business. Many of us have been trying to forecast flooring demand by looking at macroeconomic factors like job growth; GDP growth; consumer confidence; discretionary income. These general economic factors are important, but the only true driver of flooring demand is the housing market.”
“What is the fundamental unpinning of housing demand? It’s household formation. It’s people graduating from college, moving out of their parents’ home, forming families. From 1997-2007 household formations averaged 1.5 million per year. During the recession – particularly 2008-2010 – that dropped to less than 500,000 formations per year. In 2011 and 2012 formations started coming back, creating a foundation for demand…for the rest of this decade, household formations will average 1.4 to 1.5 million per year. In addition to this, you have to count the number of demolitions of obsolete housing, which will average 300,000-400,000 per year. This creates the overall housing demand number, which will hit 1.7-1.9 million over the next few years.”
“Carpet and flooring will move with residential investment, and residential investment will be up strong double digits in the next 2-3 years. The housing recovery – and the flooring recovery – has begun. The question we should all be asking is, are we prepared, and are we positioned for success?”
Insight 2013 concludes Tuesday, Jan. 22. For more on Shaw go to shawfloors.com.