The commercial flooring segment enters the second half of the year on uneven footing as contractors, manufacturers and specifiers navigate tariffs, labor shortages and cautious market spending. However, some end-use segments are proving to be resilient in the face of ongoing challenges.
“In 2025, there was a lot of disruption with tariffs that created a lot of interesting dilemmas, such as creating pre-buys early in the year,” said Jeff West, SVP of brand strategy, Shaw Industries. “The market doesn’t like confusion and disruption—and that put projects on hold.”
The specified contract business represented nearly three-quarters of the total commercial flooring market last year, according to preliminary FCNews research. Although the market saw a low single-digital sales decline last year, a few sectors and product categories managed flat to modest growth.
Renovation activity remained a bright spot across the board as companies reconfigured offices, upgraded aging facilities and invested in enhancing employee and customer experiences.
“Renovation work continues to be good despite the uncertainty we are facing today,” noted Geoff Gordon, executive director of Fuse Alliance.
The industry entered 2026 facing familiar pressures: inflation, rising material costs, tariffs and a persistent installer shortage. “Labor is increasingly scarce due to the illogical requirements of legacy product designs,” Mark Bischoff, Starnet president and CEO, stated. “Our members have quite the challenge competing for blue collar talent that would prefer much easier physical requirements associated with [other] skilled trades.”
Fanning the flames are high borrowing costs, which slowed new construction and delayed renovation timelines. “Economic conditions in the form of tariffs and high interest rates impacted both the specified business and Main Street [commercial],” noted Ben Elliott, director, LVT product management, Tarkett Commercial.
Meanwhile, sustainability pressures continue reshaping flooring specifications, pushing manufacturers toward recycled content, low emission materials and decarbonization strategies. “Sustainability expectations continue to grow across the commercial flooring industry,” said Jim McKeon, vice president of sales, Interface.
From a product standpoint, soft surfaces remain a cornerstone of specified contract work. “We continue to see strong demand for modular flooring solutions that deliver design flexibility, performance and sustainability,” McKeon said.
Broadloom maintained a strong presence in hospitality, senior living and corporate interiors, meeting demand for comfort and large scale visuals.
In contrast, 2025 hard surface sales were flat to modestly higher than the prior year. Resilient flooring led the way, driven by healthcare, office and retail needs for durable, low maintenance products. LVT remains the star attraction, as the subcategory (including glue down, loose lay and rigid core) represents an estimated three-quarters of the commercial resilient market. However, tighter budgets and life-cycle cost concerns pushed some specifiers back toward VCT and other value-driven flooring.
“When LVT gets damaged, there’s no way to bring it back to life,” said Yon Hinkle, vice president of resilient, AHF Products. “The only way to fix it is to replace it. VCT can be buffed, cleaned and restored to look like new.”
Ceramic tile also expanded its commercial footprint. “The ceramic tile market continues to thrive despite broader construction and economic challenges impacting the flooring industry,” Rocamador Rubio, director, Trade Commission of Spain, reported.
Despite facing economic uncertainty, several key sectors continue driving demand. Following is an overview:
Office space
After several sluggish years, the workplace is showing signs of life, as more companies implement return-to-office policies and upgrade spaces for specific uses. “We have more open space where people are sitting,” Shaw’s West noted. “I think in some instances, where stained concrete was used, people are starting to think about acoustics, and carpet is very favorable there.”
Historically, corporate has maintained an estimated 13% of commercial market share, but industry members anticipate that figure to increase this year.
Carpet tile remains a popular choice in collaborative and multi-use spaces. “Broadloom is used sparingly in conference rooms, C-suites and professional services, and it is losing share to carpet tile and hard surface in TI/ property management applications,” stated Jeff Galloway, vice president, product management, Mohawk Group.
Resilient floors, led by LVT, are reportedly benefiting from the push toward hospitality inspired commercial interiors, where wood- and stone-look finishes help create warmer, more inviting spaces for employees returning to shared environments.
Ceramic is gaining ground in lobbies, cafés and amenity areas where employers seek premium aesthetics to help attract workers back to the office. “Large-format porcelain products and seamless indoor/outdoor applications continued gaining traction within these spaces,” Rubio observed.
Professional commercial flooring contractors corroborate the trend. “The workplace segment continues to be the leading volume segment,” Starnet’s Bischoff stated. “However, it’s very closely followed by the combination of K-12 and university work.”
Healthcare
Healthcare remains the strongest segment as facilities modernize spaces and expand services. Fueling demand is investments by facilities to adapt to the needs of an aging population and growing focus on preventative care.
“Healthcare has been very big the last two to three years,” Shaw’s West said. “People are willing to pay more, particularly in a performance market, for products that hold up and perform.”
Flooring choices in this bellwether sector reflect infection control, durability and need for rapid installation in occupied environments. For example, sheet vinyl remains indispensable in surgical suites and high acuity areas where welded seams reduce pathogen harborage. The product also provides solutions with respect to relative ease of maintenance and upkeep.
Carpet tile continues growing in senior living and medical offices, lounges and behavioral health spaces where acoustics and comfort matter most. Hard surfaces are specified for clinical areas, where rubber and high-performance resilient flooring are coveted for their anti-fatigue and anti-slip properties.
“Homogeneous and heterogeneous resilient sheet products are widely used in acute care,” Mohawk’s Galloway said. “VCT remains a staple in non-sterile areas but is quickly being replaced with LVT as a premium, lower-maintenance option.”
Ceramic is positioned as a solid choice for healthcare, supporting demand for interiors requiring hygienic, easy-to-clean and low-maintenance flooring. “Slip-resistant porcelain surfaces and large-format products continued gaining popularity within this segment,” Tile of Spain’s Rubio said.
Education
Education remains one of the steadiest commercial sectors, driven largely by continued spending across public and private institutions. The segment, which includes K-12 and higher education, comprises nearly one quarter of the commercial market, according to FCNews research.
“We’re getting a lot of different products, colors and design elements for education,” AHF’s Hinkle observed. “This is a huge departure from what we used to see and plays a role in how school buildings are being refurbished and constructed.”
Carpet tile retains a strong foothold in classrooms, libraries and collaborative spaces. By comparison, hard surfaces are preferred in corridors, cafeterias and other high-traffic areas.
A new development is increased demand for VCT, industry members say, a workhorse product specified in school buildings for decades before the rise of LVT and all its iterations. Education spaces are also seeing expanded usage of rubber, linoleum and ceramic tile, as campuses upgrade student housing and amenity spaces. “Renovation cycles are accelerating as districts tap federal and state funding to modernize classrooms, cafeterias and STEM labs,” Tile of Spain’s Rubio pointed out.
Hospitality
Hospitality, too, witnessed an uptick in renovation activity last year, although inflation and job concerns are slowing momentum this year. Still, flooring plays an important role in upgrades in this sector.
“Flooring supports design differentiation and brand experience while systems supporting room turns and refreshes are increasingly important in this highly competitive segment,” Starnet’s Bischoff pointed out.
Historically, hospitality is a stronghold for carpet tile and broadloom, and demand is expected to remain consistent.
“Hospitality is very price driven,” Fuse Alliance’s Gordon said. “We are seeing more hard surface in rooms combined with area rugs, but the majority of new room construction still uses broadloom because of its competitive price point and acoustical benefits.”
Hard surfaces, especially LVT, are gaining coverage in lobbies, restaurants and boutique-style environments. “Many mid-scale properties are replacing guest room broadloom carpet with LVT for simpler cleaning routines and longer replacement cycles,” Tarkett’s Elliott observed.
Ceramic is among the most popular floors in hospitality spaces and with good reason. “Ongoing hotel renovations, boutique hospitality projects, luxury wellness spaces and the growing preference for indoor/outdoor integrated design all contributed to continued demand for ceramic and porcelain surfaces,” Tile of Spain’s Rubio reported.
Retail
The retail contract business is being reshaped by a wave of store remodels, shifting shopper expectations and a push for immersive, durable settings, research shows. Case in point: national chains are refreshing store footprints and specialty retailers are investing in experiential design to compete against e-retailers. “Retail has been very bumpy over the past two decades as stores have reduced their brick-and-mortar footprints,” Mohawk’s Galloway stated.
Soft and hard surfaces are prominently used in retail, as choices depend largely on end use. For example, “mass retailers will work LVT into certain areas for a design element, such as in a grocery area or aisle,” AHF Products’ Hinkle noted. “In smaller spaces, we’re seeing a lot of LVT being utilized and variations of engineered wood and laminates going into those spaces.”
Soft surfaces continue to play a targeted role, with carpet tile the leading product in areas where quiet and comfort enhance the shopping experience. Hard surfaces lead the category, with LVT and ceramic widely specified for durability and low maintenance.
Niche products such as polished concrete and hybrid resilient systems are reportedly gaining traction in big box and grocery formats. “A lot of new retail work is moving to polished concrete since it is lower cost and easy to maintain,” Fuse Alliance’s Gordon said.
What looked like a promising segment, though, has leveled off somewhat. “It looks like it’s starting to plateau a bit,” Starnet’s Bischoff stated.
Medium-term outlook
Looking ahead, industry executives express cautious optimism for the second half of the year. Recurring issues stand to impact some commercial segments more so than others. “Installation quality and labor shortages continue to be a concern, highlighting a need for continued recruitment and education,” Tarkett’s Elliott said. “Margin compression is a challenge, leading manufacturers to find additional ways to differentiate.”
Technology is also changing the landscape. “AI and digital tools are improving productivity, allowing smaller, well-run contractors to compete more effectively,” Starnet’s Bischoff said. “We’re seeing a widening gap between companies that are prepared to act at scale and those relying on legacy processes.”
