The Global Flooring Alliance reports that while members are still seeing positive sales growth, profit and margins are under pressure.
Last month, the Global Flooring Alliance (GFA) scheduled an additional meeting to discuss the current market situation in the flooring industry. The group reports that high inflation, rising energy and transport costs and the war in Ukraine are putting pressure on margins worldwide. They concluded that price increases are necessary because of all these costs. However, caution is advised since the consequence of this is that at the end the consumer is presented with the bill. The market should not be ‘locked’ due to ill-considered price increases.
GFA keeps a close eye on interest rates which threaten to slow the economy. In addition, delivery times and availability of products are also putting pressure on the market, the group said. The members of the GFA report they are cautious with precise forecasts for the second half of 2022. They expect a slowdown and possibly a decline in sales compared to the same period last year.
The GFA sees partnership as the key to dealing with the current market conditions and advise companies to maintain a good relationship with supplier and customer and share the pain. Work together wisely and thoughtfully; don't just switch suppliers. It is especially important now to understand partnership and put it into practice. A positive market approach applied in this way can take the sting out of today's challenges.
Despite these many challenges of this moment, members of the GFA view the continued growth in turnover as promising. The housing markets in the countries of the members affiliated with the GFA are also still outperforming.
“The massive inflation and cost increase worldwide and the unpredictability of delivery times calls for a sensible partnership with suppliers and customers," said GFA Chairman Einar Gottskalksson. "This is not only about supporting each other with regard to logistics and products, but especially the exchange of information and the sharing of experiences is invaluable. Information sharing has made Global Flooring Alliance an important partner for the trade for over 30 years, offering precious added value for its affiliated members.”