The Short-Term Outlook Indicates Only Moderate Growth at Best for 2011-12

According to AMA prospects for the tiles market into the medium-term will be determined by the timing, strength and pace of recovery of the economy, which in mid 2011 still remains relatively fragile. The short-term outlook indicates only moderate growth at best for 2011-12, given the slower than anticipated recovery in the housing sector and the more pessimistic outlook for key commercial sectors such as retail and offices. Growth prospects 2013-15, however, are more positive with annual rates of 5-6% currently forecast with market value forecast to reach around £515m The market experienced moderate growth in the period up to 2007. However, in the 2008-10 period, the overall market declined by around 20% to an estimated value of around £430m, as the recession impacted on demand in all key commercial and residential sectors. In general, ceramic & porcelain and natural stone tiles are considered deferrable purchases and the sector has undoubtedly been affected by lower consumer spending throughout the recent difficult economic climate. The downturn in the housing market has been a key contributory factor, with demand from both new housebuilding and RMI work significantly down from pre-recession levels. Non-domestic construction has also experienced declining output with key sectors, such as retail and commercial offices, experiencing declining demand 2008-10.The ceramic & porcelain tiles sector dominates the market in 2010 with estimated value share of around 80%. However, ceramic and porcelain tiles have also been affected by lower demand for wall tiles as the trend for upstands and metal and glass splashbacks within the domestic kitchen sector continues. Ceramic floor tiles have been more buoyant than wall tiles, underpinned by demand from the contract sector and the trend for larger format tiles. The domestic floor tiles sector has also derived some limited benefits from the housebuilding sector with floor tiles now offered in a wider range of locations, including kitchens, bathrooms, utilities, hallways and cloakrooms. The report provides a detailed overview of the natural stone sector, which has enjoyed stronger market conditions than ceramic & porcelain tiles over the last few years with value decline less than the total market. Natural stone has particularly benefited from the trend for more luxurious bathroom refurbishments in the upper and middle market sectors. In terms of supply structure, the market has become more fragmented in recent years with a larger number of stone specialists entering the market with dedicated showrooms and enhanced product ranges. However, the ceramic tiles sector has seen some major changes over the last 2 years with the fate of Pilkington's Tiles a notable landmark. Prospects for the tiles market into the medium-term will be determined by the timing, strength and pace of recovery of the economy which in mid 2011 still remains relatively fragile. The short-term outlook indicates only moderate growth at best 2011-12 given the slower than anticipated recovery in the housing sector and the more pessimistic outlook for key commercial sectors such as retail and offices.Growth prospects 2013-15, however, are more positive with annual rates of 5-6% currently forecast with value likely to reach around £515m. Source: tilezine.co.uk