2009 was a challenging business climate for our industry. Where do you see business going in 2010?
There is a strong consensus that 2010 will continue to present a challenging climate, including the continued decline of the commercial business, though not as much as we saw it decline in 2009. We think the government and healthcare sectors, which were least affected in 2009, will continue to be least affected; and that corporate and hospitality will continue to struggle.
There’s less agreement around the residential business scene, with predictions ranging from neutral to slight growth. We are predicting slight growth, meaning single-digit, gradual growth-but growth nonetheless. We see some improvement in new home construction, but flooring is so late in that cycle we don’t anticipate feeling any of that impact until late in the year. Most of the impact will be in the residential replacement arena.
As with all interior furnishings, the success of flooring is dependent on how well it’s designed. We invest heavily in maintaining our styling leadership position in both the residential and commercial markets-as evidenced by our 2009 Surfaces Best New Product Award for Adura and 2009 Best of NeoCon Silver Award for the Virtual Library-and will continue to do so through 2010 and beyond. From a technology standpoint, innovation is the cornerstone of our business. Advancement in installation methods will continue, as can be seen in what’s already been developed with floating LVT, as well as fiberglass sheet vinyl and “click” hardwood. In other products, new advances in surface treatments can closely emulate what artisans did by hand many years ago, adding to the realism in both design and texture of the product.
In what way will green products be an important aspect of business in 2010?
Clearly, green products are of vital importance in the commercial arena, and they’re certainly gaining in importance to the residential consumer. Reducing our environmental footprint through extensive recycling in virtually all categories is where we are placing a lot of emphasis.
What message would you like to give the industry for 2010?
Despite the continued anticipated challenges, there are a number of things to be excited about. First, there is tremendous pent-up demand. People have delayed their flooring purchases, but they still have a desire to enhance the appearance of their surroundings, whether it’s a home or a commercial building. Couple that with the fact that throughout our industry-retail, distributor, manufacturer-everyone has dramatically reduced inventories. That presents the potential, when confidence returns, for there to be a bigger increase than what’s being forecast. Additionally, everyone has reduced costs dramatically; therefore, profitability can return to respectable levels at lower sales volumes.
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