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DIMENSION STONE ADVOCATE NEWS
Outlook Issue No. 18 October – December 2004
Statistical Parameters: (a) Sales related-demand. The (overall) production-demand index was 100 for 1997, 126 for 1998, 144 for 1999, 164 for 2000, 177 for 2001, 190 for 2002 (final), 218 for 2003, and 251 for 2004 (preliminary). The Granite Countertop Demand Index was 100 in 1997, 143 in 1998, 182 in 1999, 263 in 2000, 290 in 2001, 354 in 2002, 452 in 2003, and 580 in 2004 (preliminary). The Demand Index for Granite and Marble Tile was 100 in 1997, 117 in 1998, 123 in 1999, 145 in 2000, 153 in 2001, 169 in 2002, 199 in 2003, and 250 in 2004 (preliminary).
(b) Sales related-price. Granite Countertop Prices (index) was 100 in 2002, 84 in 2003, and 83 in 2004 (1st Half). Marble Tile Prices (index) was 100 in 2002, 111 in 2003, and 117 in 2004 (1st Half). Granite Tile Prices Index) was 100 in 2002, 142 in 2003, and 114 in 2004 (1st Half).
(c) Foreign-U.S. Competition-related: The strong Euro has become an ongoing part of our economic life: the Euros per U.S. dollar (average) rate was 0.94 in 1999, 1.09 in 2000, 1.12 in 2001, 1.06 in 2002, and 0.89 in 2003; 0.89 in 3Q 2003, 0.84 in 4Q, and 0.880 in 1Q 2004; 0.79 in February 2004, 0.82 in March 2004, and 0.83 in April 2004. These International Monetary Fund statistics show that foreign producers selling in Euros have lost their competitive advantage in the U.S. beginning in late 2002 and it has stayed lost. So exporting Euro-area producers are now under a continuing disadvantage from the strong Euro.
To review the Canadian-U.S. situation, the Canadian dollar per U.S. dollar (average) was 1.48 in 1998, 1.49 in 1999, 1.49 in 2000, 1.55 in 2001, 1.57 in 2002, and 1.40 in 2003; in 3Q 2003 it was 1.38, in 4Q 2003 was 1.32, and in 1Q 2004 was 1.32. The situation here is much less extreme, although it does resemble the Euro situation.
Announcement: The next issue (Issue 19) will feature a comprehensive index of all the previous issues. "Early-Bird" Outlooks will still be appearing on the cover in the future when I have talked to enough observers to get a clear picture but before I have talked to everyone. In a year, there will be four "Early-Birds" on the cover and four commodity-specific issues such as this: two outlook issues and two news-statistics issues. In view of the Fed interest-rate hikes, there will probably be a "Late-Bird" to check for weakening in the economy.
Stone Business has issued its 2004 Buyer's Directory in July; it features stone fabricators/installers and stone suppliers around the world.
The U.S. market conditions and outlook for 2004 reported by our observers is as follows:
A Prominent Elberton Source (granite): Monumental stone sales in 2004 are up 5% from 2003. Curbing granite sales in 2004 are about the same as in 2003. Granite countertop sales in 2004 are up 15% to 20% over 2003. Imports of Chinese black granite monuments (made from Chinese or Indian rough blocks) have been strongly increasing, and at very low prices; there is little apparent Chinese interest in gray granite monuments.
A Prominent Indiana Limestone Source: Overall 2004 Indiana limestone sales are about level with 2003.
An Indiana Limestone Producer: Limestone sales in 2004 are about the same as 2003, but they could have sold more stone, if they could have found trucks to move it.
A Midwest Granite Producer: Building granite sales in 2004 are up 5% from 2003. Granite countertop sales in 2004 are up 15% to 20% from 2003. Monumental sales in 2004 are up 7% to 10% from 2003. Residential sales are still very strong. The Chinese are buying more rough blocks worldwide, including from the U.S., and exporting finished products, especially to Japan.
A Midwest Granite Producer: Granite countertop sales in 2004 are about level with 2003. Monumental granite sales in 2004 are up 5% from 2003, but 2005 sales look to be soft. Chinese finished monument sales in the U.S. are strong, and at ultra-low prices. Granite rough block sales in 2004 are up 10% to 15% from 2003, mostly to Asia and particularly to China; 2005 should be even better. Granite cut-to-size sales in 2004 are about the same as 2003. Shipping is quite tight now; containers seem to be slow returning from China.
An East Coast Granite Producer: Sales of cut-to-size and architectural granite in 2004 are down 5% from 2003. The oversupply of office space has cut plans to build office space down to almost zero; 2005 is likely to be worse than 2004. Granite curbing sales in 2004 are down by 10% from 2003; 2005 will be level with 2004. Export block sales in 2004 continued poor: Europe was zero and Asia was level with 2003. The firm is going to expand in granite countertops. Prices of granite countertops are down overall, but prices of countertops of fancy Brazilian granites are up, and the Brazilians are still able to sell more. The granite countertop market may be starting to go two tier: the cheap stuff with eroding prices, and the fancy granites with increasing prices and faster growing demand. Granite countertops may have opened the eyes of the average U.S. consumer to the beauty of stone, opening markets for other stone items like tile: If beautiful countertops why not beautiful floors?
An East Coast Granite Producer: Sales of monumental granite products in 2004 are up 5% to 7% over 2003. Granite curbing sales in 2004 are level with 2003. Granite landscaping stone sales in 2004 are up 15% to 20% over 2003. Residential stone sales are strong, and multicolor stones like granite are the hottest; marble suffers because few of them are multicolor. Some consolidations and acquisitions in the Elberton and Barre granite firms is likely.
An East Coast Slate Source: Sales in 2004 of slate products are about level with 2003. Sales have also been about the same for each kind of product (e.g., structural, roofing, flooring); none were notably stronger than another. The backlog is now three to four weeks for producers.
A Sandstone Producer: Building stone (windows, ashlar, capstones) sales in 2004 are level with or slightly up (1%) over 2003. Residential (general) sales in 2004 are about level with 2003; there has been some weakening since March. The backlog is about two weeks now.
An Importer of Marble and Granite : Overall sales in 2004 are up 15%-20% from 2003; countertop sales in 2004, however, are up 12%-15%. Prices of granite countertops have been moving downward because of Chinese sales of cheap granites. The Chinese are now exporting precut countertops. Granite still seems to be growing in popularity compared to marble and limestone, as is slate. The residential market in 2004 is clearly up from 2003.
Welcome to Dimension Stone Advocate News (DSAN). DSAN will appear on a frequent but irregular basis and has been designed to quickly update busy executives and professionals on dimension stone-related developments, usually with a reference to where the item appeared so that more information can be obtained if needed.