How COVID-19 is Impacting Flooring Growth Unevenly
The COVID-19 pandemic has dramatically impacted nearly every industry in the world, including the flooring industry. Some industries, like restaurants and bars, are hurting, while other sectors, like telehealth, are soaring.
COVID-19’s impact on the flooring industry hasn’t been as straightforward. It’s been rather varied. Depending on who you ask and what part of the flooring industry they work in, you’re probably going to get a different answer.
It turns out that COVID-19 is impacting flooring growth unevenly and disparately across different markets and sectors.
Residential Market Booming
Despite initial fears, the residential flooring market has held up well. New residential construction and residential remodeling are both holding steady and have been throughout the pandemic.
In fact, new construction is where it was this time last year. The only real difference is there is more construction of single-family homes resulting in more total floor area. Ultimately, this jump in single-family houses is a good thing for the residential flooring sector.
On the same token, remodeling spending is up 12% year-to-date. Experts speculate that this growth is due to the massive amount of people staying home because of the pandemic. Newly remote workers are fixing up their home office, and others are realizing their home’s issues after being stuck in it for longer than usual.
When the pandemic hit, everyone was worried about the residential market because of how COVID-19 would impact the economy and household incomes. However, thanks to the government’s paycheck protection program, low-interest loans, and additional unemployment – more people have been able to weather the storm than initially anticipated. Without the $3.5 trillion in stimulus benefits, the residential market might be in a different place.
For now, the residential flooring market has fared well throughout the pandemic.
Commercial Market Declining
The commercial flooring market is seeing an almost opposite effect. It seems like contractors are finishing their previously booked jobs and aren’t getting anything new. Some contractors have work throughout the rest of 2020 and early 2021. However, according to anecdotal data and the AIA index, it looks like once the pipeline runs out, there are no new jobs to replenish it.
Why is there such a different response on the commercial side of things? A huge reason for this is the pandemic’s effect on local businesses. Restaurants, small retail shops, and other local commercial spaces are being wiped out and beaten down by the impact of COVID-19.
Restaurants who depended on the lunch rush from office workers now have empty dining rooms because everyone is working from home. Small retail shops and downtown businesses that depended on foot traffic have dried up as social distancing has become the norm. Plus, there could be even more significant trends at play.
The COVID-19 pandemic is causing major shifts in lifestyle, especially regarding where people live. Statistically speaking, we’re seeing a mass movement of people moving out of the cities and into the suburbs and rural areas. Moving companies are reporting that they’re completely booked for the foreseeable future.
Since people can work and go to school from home, they’re no longer tied to the city, and thus, they can move out of it. According to data released by NPR, 7.7 million people have moved since the start of the pandemic.
As “Main street”, downtown, and local business suffer, the commercial construction and commercial flooring industry also suffer. That’s what we’re experiencing right now with COVID-19.
Future Growth Projections
For now, residential contractors and the residential market should stay thriving. Statistics show that people generally fix up their homes within their first two years of living there. Those first two years will see more improvement projects than any other time, aside from when the homeowner wants to sell.
Since people are moving into new homes and out of old ones, this bodes very well for the residential flooring market. It looks promising for at least the next couple of years as people settle into their new homes or finish the projects they realized they needed to do while staying at home.
For the commercial flooring market, the future is unclear. Ultimately, the commercial flooring industry will depend on the resiliency of the commercial businesses on which it depends. We won’t be able to see how everyone survives until we are further outside of the eye of the storm.
It’s worth noting that experts expect to see a 10% drop in the number of specialty stores, including specialty home improvement and flooring stores, over the next two years. This is mostly due to the fact that large box retailers could stay open, while smaller, specialty shops were forced to close. However, the volatility of the economy, and transportation and shipping is also to blame.
Ultimately, the residential flooring market is expected to see continued growth, and the commercial flooring market is murky for now. Experts believe contractors and manufacturers’ survival within the commercial sector will come down to grit, innovation, and tenacity.
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