By Reginald Tucker
Turns out that even the most aspirational flooring products such as hardwood flooring are not immune to the economic effects of COVID-19.
Hardwood flooring sales heading into 2020 were chugging right along, with many industry executives riding the wave of a strong finish to 2019, coupled with profitable winter flooring markets to start the new year. But the novel coronavirus—with its wide-ranging repercussions on the global economy—changed all of that. With the bulk of economic activity coming to a screeching halt, save for industries providing essential services, many hardwood flooring executives are readjusting their forecasts for 2020.
“Up until the pandemic, Wickham Hardwood was tracking between 6%-7% ahead of last year,” said Paul Rezuke, vice president of U.S. sales. “March stood ready to be the second-highest month of our fiscal year. (Even losing one full week to closure, we ended up with a reasonably strong month.) Assuming this challenge runs through the summer months, we are estimating a drop in business between 60%-70% for the last five months of our fiscal year.”
In FCNews’ “Executive Forecast” issue, which was published in December of 2019, most hardwood flooring industry executives were forecasting growth in the 2%-4% range for 2020. Obviously, at the time, no one counted on a global pandemic to throw a wrench into the machine.
“Unfortunately, the crystal ball is a bit cracked right now,” said Dan Natkin, vice president, hardwood and laminate, Mannington. “Overall, hardwood started the year well and to the high side of the forecast. In the past few weeks, we have seen that shift dramatically as COVID-19 has begun to impact demand. We have two demand models running right now—one with a 90-day impact to demand and another, more prolonged impact. Overall, we believe demand may be down 20% or more by year’s end, depending on the length and depth of this downturn.”
While no one can predict exactly how this scenario will play out—or calculate precisely the total economic hit the hardwood category might take—many are in agreement that when the flooring industry bounces back, and it will eventually, it will do so in a major way.
“We believe the recovery will be in all facets of the economy—residential remodel, new home construction and commercial, said Wade Bondrowski, director of U.S. sales, Mercier Wood Flooring. “There’s already evidence of pent-up demand.”
Mannington’s Natkin said he sees positive signs coming out of the new home construction market, which is holding up well during this downturn. That’s primarily due to interest rates remaining low as well as ongoing projects that are deemed essential business in many states. “Coming out of this, we believe new home construction will lead the charge,” he said. “The interesting element will be as consumers shelter in place, how many will look around their homes and recognize the need for updating. We think there will be resurgence in nesting and investing in the home.”
(Look for more insights and observations from other leading hardwood flooring executives in the upcoming “Hardwood: State of the Industry Report,” due out in the April 13/20 edition of FCNews.)