About josephlundgrenconsulting

Joe is a globally recognized product and marketing expert in the ceramic and stone worldwide markets. His specialty is Business Development, Product Management, and Marketing. He has developed his expertise in strategic planning, new product development and marketing strategy during his twenty-seven year career at Dal-Tile, a subsidiary of Mohawk Industries.

Bathroom Renovations – #whytile

Bathroom Renovations – #whytile

Is there anything more satisfying than a pristine bathroom where an outdated one once was? Here are 17 renovations that show Why Tile is the right choice for your next bathroom.

#whytile #tile #bathroom #interior #renovation

17 Inspiring Before and After Bathroom Renovations

In the News – The US ceramic tile market and the new duties on Chinese imports

In the News – The US ceramic tile market and the new duties on Chinese imports

With the adoption of countervailing and antidumping duties on Chinese tile imports in the US, the race is on for both US tile manufacturers and all the other supplying countries to win a slice of the 64.3 million sq.m of Chinese products.

Joe Lundgren (Joseph Lundgren Consulting, USA) joe@jlcconsult.com

After the adoption of countervailing duties (from 103.77% to 222.24%) on Chinese tile imports in September, the U.S. Department of Commerce also introduced new antidumping duties of between 114.49% and 356.02% on November 7. The investigations followed the petition filed by the Coalition for Fair Trade in Ceramic Tile, which is made up of the 8 US ceramic tile manufacturers.

With China’s exit from the US market now all but certain, the race is on to win a slice of the 64.3 million square metres (approximately US $483.1 million) of Chinese products imported in 2018.

The most logical thing would be for the current US manufacturers and existing importers to gain the vast majority of this potential share. If things remained as they are, the 22% of the US ceramic market covered by Chinese tiles would be divided up between the other competitors.

But this is only theoretical.

Since US manufacturers are currently utilizing only 76% of their 107 million sqm capacity (of which Dal-Tile accounts for 49%), in theory they have the opportunity to increase their annual output by a further 24 million square metres. In actual fact it is extremely difficult even for US manufacturers to compete with such a large number of importers who already have an extensive presence across the country.

To understand how the importers are able to continue to hold on to such a large share of the US market, it is useful to analyse the key ingredients for success in the US market. These are: established relationships (in some cases dating back decades); low price; favourable payment terms (90-120 days); a wide range of products to meet all the needs of US distributors; the possibility of operating off stable currencies (e.g. the Euro); and the low cost of ocean shipment rates, in many cases lower than the steadily rising costs of road transportation within the United States.

Given these considerations, there are many existing countries winning new market share in the short term: Spain, Brazil, Italy, Turkey (depending on the geopolitical situation between the US and Turkish governments) and Mexico (if the Mexican manufacturers succeed in lowering the transportation costs for their porcelain production to the US).

In the long term new countries will be able to provide all the “cake ingredients” and gain share in the USA, particularly India, Vietnam, Colombia and Peru.

Watch Joe Lundgren’s video-interview and read the full article in Ceramic World Review 134

CWR 134

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In the News – Builder Confidence Ends the Year Strong

In the News – Builder Confidence Ends the Year Strong

The NAHB/Wells Fargo Housing Market Index (HMI) ended 2019 on a high note after a weak finish in 2018. The December reading for the HMI was 76 — the highest score in 20 years. Builder sentiment is being fueled by persistently low levels of resale inventory and solid economic conditions, including low interest rates, historically low unemployment and accelerating wage growth. By comparison, the HMI was at a level of 56 in December 2018 because of higher mortgage interest rates and a more hawkish Federal Reserve.

Mirroring the HMI, single-family starts increased 2.4% in November, while apartment construction posted an almost 5% gain for the month. With only December data outstanding, 2019 year-to-date single-family starts ended the 11-month period down just 0.4% compared to the same period in 2018. When the December data are recorded, we expect single-family starts to end 2019 approximately flat, thanks to a second-half acceleration. This is clearly seen in the November single-family home sales report, which found new home sales were up almost 10% on a year-to-date basis, and inventory declining to a 5.4-month supply, pointing to future construction growth.

Although most housing indicators, including the most recent pending home sales report from NAR, are showing year-over-year gains and signaling additional expansion, it is important to keep in mind the degree of underbuilding that has taken place during the last decade. Indeed, a recent NAHB report examining the last 10 years of home building found that on a population-adjusted basis, single-family construction in the 2010s operated at about half the pace of the uniform decadal rate that prevailed during the 1980s, 1990s and 2000s. This degree of underbuilding and signs of a Federal Reserve on hold with respect to future interest rate hikes indicate that home construction will expand in 2020.

–NAHB Chief Economist Robert Dietz
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In the News – A Decade of Home Building: The Long Recovery of the 2010s

In the News – A Decade of Home Building: The Long Recovery of the 2010s

The 2010s was by far the lowest decade of single-family production in the last 60 years. During this 10-year period, single-family home construction totaled just 6.8 million units. By comparison, single-family starts ranged from 9.3 million units in the 1960s to 12.3 million in the 2000s.

 

The reduced amount of single-family home construction over the last decade is even more striking when considering that the population of the United States has continued to increase over time.

Why were the 2010s different?

While reduced demand in the aftermath of the Great Recession had a large role in holding back home building — particularly in the first half of the decade — the primary causes that contributed to the relative construction weakness over the last 10 years were due to supply-side headwinds and declining housing affordability.

Specifically, builders have been dealing with a chronic lack of skilled workers (there were more than 300,000 open positions in the construction sector in October 2019); a shortage of buildable lots; onerous regulations; tariffs on lumber and other key building materials; and slow growth in acquisition, development and construction lending that has failed to keep pace with demand.

The lack of supply has driven up home prices and compounded affordability challenges. The problem is most acute in the entry-level market: Demand is strong, but the cost of construction has risen so significantly that it is not economically feasible for most builders to construct housing that an average-income household can afford.

What are the solutions?

To help builders boost housing production, local governments need to:

  • Roll back exclusionary zoning requirements that result in lower housing density;
  • Reduce costly impact fees associated with land development and housing construction;
  • Allow small lots, small homes and accessory dwelling units;
  • Rebuild the industry’s infrastructure — the labor force and the reliable sources of lending and building materials; and
  • Expedite approvals for affordable projects.

What’s the outlook for the 2020s?

There is little doubt that the next generation will experience more single-family construction than the 2010s, as Gen X reaches its peak earning years and millennials increasingly seek out single-family homes for purchase. Policymakers also recognize the magnitude of the affordability problem, as demonstrated by President Trump’s executive order on housing affordability and Democratic contenders talking housing in the presidential debates.

Proposals include expanding the Low-Income Housing Tax Credit to improve affordable rental housing access, improving land use and zoning decisions to increase housing supply, and offering workforce development resources to provide jobs and training. Comprehensive housing finance reform, including the future of Fannie Mae and Freddie Mac, will also occur during the 2020s, leading many experts to expect slow and steady progress in the decade ahead.

NAHB Chief Economist Robert Dietz provides further analysis in this Eye on Housing blog post.

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