2022 Executive Forecast: Leaders say demand will continue

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Industry leaders bullish about the prospects 

The flooring industry’s top executives are forecasting a sales increase between the mid and high-single digits in 2022, saying consumer demand will continue to be very strong for home improvement projects. The projection comes at the tail end of 2021, which has been a record-setting year for many flooring dealers. Their optimism comes despite myriad challenges facing the industry: supply chain woes, inflation, labor shortages and ongoing COVID-19 variants—issues likely to persist well into 2022, but not enough to derail flooring’s momentum.

Our Executive Forecast 2022 coverage begins here.

By Ken Ryan Despite a bevy of obstacles—from raw material shortages to inflationary pressures—the flooring industry is poised to grow mid- to high-single digits in 2022, according to several major manufacturer executives.

The consensus among the leaders is that demand is still very strong, and coupled with a robust builder market and ongoing pent-up demand among consumers for home renovations, the stage is set for another solid year for the flooring industry.

While the same challenges that persisted in 2021 are likely to remain, executives say the positives outweigh the negatives.

executive forecast

2022 Executive Forecast:
Russell Grizzle
president and CEO
Mannington Mills

Based on the overall trends and fundamentals, I expect good growth in the industry not just in 2022 but for the next several years. I am expecting an increase of upper mid-single digits for the industry—above 5% but not quite 10%. A lot of that growth is coming from price increases as opposed to unit growth.

We’re expecting to see some improvement with supply chain issues and raw materials, at least from an availability standpoint as opposed to a pricing standpoint. Prices are still high but availability of most raw materials is limited, so you have backlogs.

I believe there still will be emphasis on the home in 2022 and beyond. It will be awhile before we are completely normal again given the variants, and the stay-at-home trend is here to stay.

As for biggest challenges facing the industry, the limited availability of raw materials is hurting service because everything is in short supply right now. That’s the one saving grace, that flooring isn’t the only product in short supply, and people are more patient about it when compared to historical norms.

We see domestic manufacturing as a huge opportunity. Mannington is well down the road with onshoring, and we would be able to onshore more if we had the raw materials. We’ve worked really hard on domestic manufacturing, and like our position in the product mixes and the channels we are in. I’m proud of the fact that during the pandemic we have not cut back on product; product design and innovation continues to be our life blood. As such, we have some exciting things coming out.

2022 Executive Forecast:
Jeff Meadows
president, residential sales
Mohawk Industries

We think 2022 will be a good, solid year for flooring. The way we look at it, commercial is going to be better in 2022 than ’21. Builder and single-family home construction will still be very strong, and normally when builder business is strong, and people are selling homes and renovating existing homes, the flooring business does well. And we still think there is some pent-up demand for retail replacement.

In terms of challenges, raw materials (both in cost and getting them) is still going to be a challenge—so it’s a double whammy. Labor is going to continue to be an issue. The carpet plants are very labor intensive while the LVT and laminate plants are more automated, so there is less of an impact on labor. You also have labor shortages with drivers. That said, demand is still going to be solid, which is a good thing.

As for Mohawk, at end of the day, innovation is going to win. We have a new product called UltraWood, with a real wood base and a RevWood chassis that’s very innovative. High-end carpet is really smoking. Our Karastan business is really good, and we have invested a lot in new tufting capacity and patterns. We’re starting up a new laminate plant right now, building a new LVT facility and, on top of that building another laminate plant that, will be ready by the end of 2022 [in Thomasville, N.C.]. Domestic capacity will be king, and we will be in much better shape for it.

With WetProtect, we will have the industry’s best waterproof warranty, and for customers who have asked for healthier products, we have CleanProtect technology featuring antimicrobial properties.

2022 Executive Forecast:
Raj Shah

Demand continues to be very strong for home improvement products especially flooring. Prior to the pandemic, flooring was well behind historical norms and then you add the pandemic-related demand due to work from home and educate from home. In addition, new home construction has significantly increased.

With the move to suburban homes from urban the average square feet per home is also increasing. Innovations in flooring, including LVT, waterproof laminate and wood, are also increasing homeowners’ appetite to update their floors. All of this leads us to believe it will be high single-digit growth for flooring in the upcoming year.

Despite the growth, there will be challenges for all of us. Shipping and logistics issues remain the top challenge for the entire industry. Whether it’s containers, shipping space, unloading capabilities at the ports, labor and delivery are all challenges for the industry right now. We don’t see this becoming easier in the first half of 2022. It will be incumbent for the industry to find ways to navigate these obstacles in order to keep up with the demand increases.

Inflation and labor are other issues. From electricity, natural gas, trade wars, oil, labor and shipping rates, inflation has affected every industry. Flooring has not been immune. Virtually every manufacturer, distributor and retailer has passed multiple price increases in 2021 and many announcements have been made for early 2022. So far, consumer demand does not seem to be deterred by the increases.

As for labor, whether it is drivers, installers, salespeople, etc., the “Great Resignation” has not spared flooring. Finding labor is extremely difficult and the entire industry is working to attract and retain labor.

executive forecast

2022 Executive Forecast:
Tim Baucom
Shaw Industries

We’re finishing 2021 with strong demand and look to continue that momentum in 2022. As more people are spending time inside their houses, we have seen an elevated focus on the home. There is renewed importance for transforming spaces to accommodate the new ways we live, work and play. This has impacted both the residential and commercial markets. Homeowners have a strong desire and renewed confidence to invest in their homes, and the flooring industry has seen strong and sustainable demand due to this growing trend.

Installation labor challenges persist, which is placing a cap on both the new construction and renovation markets.

We are seeing some general trends that are specific to flooring: sustainably strong carpet sales (particularly in the “better and best” segments); waterproof LVT continues to gain market share in spite of rapid cost inflation; flooring specialty dealers are innovating and thriving; residential landscape products have hit a tipping point and are growing rapidly in key markets, and commercial business is rebounding.

While demand is strong, supply issues are as challenging as I have ever experienced. The industry is concurrently feeling significant inflationary pressures driven by three compounding areas.

No. 1. Labor availability is below market demand in manufacturing, transportation and trucking and installation/construction, and this is causing permanent increases in costs. The rate of new workers is not currently matching the rate of established people in these jobs who are retiring; No. 2. Raw materials are being impacted by both supply interruptions and rapidly increasing costs. While predictable availability is improving, cost pressures are not subsiding; and No. 3. The global supply chain (ocean freight, port drayage and ground transportation via truck or train) is tangled and costs are unprecedented.

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Dec. 6/13, 2021

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