US demand to rise 4% annually through 2020
US demand for decorative tile is forecast to increase 4.0 percent annually to 3.2 billion square feet in 2020, valued at $6.6 billion. Advancing building construction expenditures will drive growth. The residential market is expected to record faster gains, bolstered by strong increases in housing completions and continued interest in kitchen and bathroom renovations. In the nonresidential market, rebounding institutional building expenditures and growth in office and commercial building spending will drive decorative tile demand, especially in flooring.
Porcelain tile to be fastest growing segment
Porcelain tile is expected to register the fastest growth in area demand terms through 2020. Porcelain tiles are durable, slip resistant, and can be made to resemble such materials as hardwood and natural stone, but at a lower cost relative to wood or stone tile. Porcelain tile can be installed by homeowners as a relatively inexpensive means of enhancing the appearance and value of their homes. The rise in popularity of thin porcelain tile (TPT) will especially bolster demand. TPT’s larger size and greater thinness, as well as performance attributes including resistance to scratches and cracking, make it a popular choice in both residential
and commercial markets.
Large ceramic tile segment to lose market share
Ceramic tile is the most popular type of tile in both residential and nonresidential applications because of its affordability and low maintenance requirements. However, ceramic tile will continue to lose market share going forward to higher value alternatives such as porcelain and stone tile, which are perceived to have superior aesthetic and performance properties.
Flooring to be fastest growing application
Through 2020, decorative tile is expected to perform best in flooring applications. In the residential market, advances will be boosted by consumer interest in tile flooring in kitchens, bathrooms, dining rooms, and foyers, both in new houses and in renovation projects. Decorative tile flooring also appeals to construction professionals and building managers in the nonresidential market because of its durability, low maintenance requirements, and slip-resistance.
Imports to lose market share as foreign producers manufacture more in US
Foreign trade plays a crucial role in the US decorative tile industry. Through 2020, though, imports as a percentage of demand are expected to fall, as many foreign producers expand their manufacture of decorative tile inside the US in order to fulfill domestic orders more quickly and to create products specifically tailored to the tastes of US consumers. This trend will occur despite the labor cost advantages and better access to inexpensive raw materials that exist in countries like China and Brazil, which make it more difficult for US manufacturers to offer quality products at sustainable profit margins. The high-end decorative tile market is expected to remain dominated by Italy, as imported tile from this country is perceived to be stylish and modern.