Hicksville, N.Y.—While things seemed to go well overall for the ceramic tile segment in the U.S. during the first half of 2002, due to the current state of the economy executives are concerned with what the immediate future holds while believing the segment will still be in a growth mode for the long haul. “Things went well for us in the first half,” said Matt Kahny, vice president of marketing for Daltile. “We were very excited about the first part of the year but are cautious about the second half with all that is going on in the economy right now.” “The business did expand in the first half of the year,” said Donato Grosser, U.S. consultant to Assopiastrelle (Association of Italian Ceramic Tile and Refractory Manufacturers), “but due to the factors of the weakened U.S. dollar and an economy that does not seem to be moving, there is some uncertainty out there.

“The expansion will probably be somewhat less in the second half than it was in the first,” he continued, “although the industry and the U.S. market are still strong overall.” “I think tile sales are similar to this time last year; I don’t think there has been a big change,” said Bob Daniels, executive director of the Tile Council of America (TCA). “We don’t have the statistics yet, but I would say things have been pretty steady. “For the second half, we believe that factory sales of imports will probably be up a little bit,” he added. “My guess for the year is, probably a 3% to 5% increase in volume. Other people have given higher numbers but I think it is a little sluggish out there.” “Our information for the U.S. market regarding imports of ceramic tile for the first five months of the year show an increase of 11%,” said Rocamador Rubio, director of Tile of Spain in Miami.

“While we don’t think this is the best time for the U.S. economy in general, as well as the global economy, the first few months have been good. “And while no one knows how things will shape up in the market for the second half,” she added, “the U.S. market continues to be extremely important to Spain for now and in the future.” “Things went relatively well for us in the first half,” said Jim Dougherty, vice president of marketing for Crossville Ceramics. “Although the economy is relatively soft right now, we had a decent first half.” “Things went reasonably well for us in the first six months of 2002,” said John Wittmann, sales manager for Seneca Tiles. “Even though the economy is soft overall, we feel the interest is still there and as people get a little more confident with what is happening in the stock market and other things, hopefully, whatever softening we’re seeing now will climb back up.

While most companies reported a fair to good first half, many were being cautious about the immediate future. “We’re crawling into the second half right now, that’s for sure,” Wittmann said. “I’m not sure we are going to see any real rebound or changes until after the elections, so the economy might not start bearing some fruit until the first of the year but we are somewhat optimistic that things have pretty much settled down .” “Originally, back in December and January, people were making projections based on a normal economic recovery that the industry would see 5% to 7% growth,” said Kahny. “Now, we are not really sure about that. It’s a little unclear if those numbers are going to hang in there or not.” “We have nothing that leads us to believe that things will get any worse or significantly better,” said Dougherty. “Much will depend on how people react to the stock market and if some of our foreign situations clear themselves up.

Right now, the commercial market is a little bit soft, but the residential market is relatively strong.” Sam Widener, president of the Ceramic Tile Distributors Association (CTDA), agreed with Dougherty, and said, “because so many projects are not on the drawing board due to the slow economy, I see a decrease in the commercial business. It’s been a mixed bag so far this year.” Industry Trends Although rustic, earth tone products are still a hot seller in the U.S. market, consumers and retailers seem to be asking for more. “While rustics remain popular, there seems to be a growing demand for different, brighter colors as well,” said Kahny. “One of the biggest trends has become earthly metallics,” said Christine Abbate, spokeswoman for Ceramic Tiles of Italy. “Metallic finishes, trims and inserts of every size and shape are really hot. The American appetite for elegant stone looks has spurred an ever-expanding array of cost-effective, elegant and low-maintenance porcelains. To add to the effect, manufacturers are increasingly offering new lines with rectified edges. “The Italian producers continue to play with format and forms,” she explained. “Many are coming up with new modular rectangles mixed with squares, circles and cut-out geometrics.

Blues, grays and blacks seem to be the popular new colors, while warm colors like rust, brown, terra cotta and orange are also doing well. “Textural surface treatments continue to add dimension to the products,” she added. “Italian companies have created lines with an emphasis on rich, three-dimensional surfaces, inspired by natural materials including fabric, bamboo, sand, sisal, linen, woven rugs, wood, gravel and bark. “The Italian companies remain dedicated to creating a fresh and exciting array of design solutions that will appeal to the U.S. market,” she added. “While rustic has been around forever and is still going strong,” said Inma Roca, spokeswoman for Tile of Spain, “now it is a little bit more subtle and refined. We’ve also seen surface textures have become more subdued with very large reliefs.

“Mosaics are popular right now—either the true, tiny mesh-mounted mosaic tiles or the larger-sized format made to reproduce a mosaic combination,” she explained. “We are seeing this with an antiqued finish or a polished marble finish resembling glass. “With accents we are seeing many metallics, not just borders and inserts, but series which are 100% metallic,” Roca added. “As far as colors go, we are definitely going to different ones. The soft neutral colors are still very popular but we are seeing a wider color palette, especially browns which are becoming our new neutral. We are also seeing many grays and blacks as well. “We are also seeing mixed media applications combining tile and wood and other floor coverings,” she continued. “We are also seeing tile lines which resemble wood, natural textures like textiles or leather, even industrial concrete. We’ve seen a lot of this in the past year and I believe we are going to see more of that in coming collections.”

With the growth of the ceramic tile industry in the U.S., education plays a key role in the category’s growth. As more people learn about the product, it will only help a booming business become even stronger. “As more of the retailers, big chains and even companies like Shaw In dustries and Mohawk Industries get involved in the ceramic tile industry,” said Daniels, “the people dealing with the product must understand what needs to be done outside of the tile to use tile and they have to understand the range of the products and how they function. “We believe education is critical,” he added. “Many people are trying to push education into the industry. We are and many other associations are. It’s sort of like leading a horse to water.

Getting people to recognize the need is the tough part. For the future, I believe we are going to see continued growth in the 5% range per year for the next few years.” Kahny, who noted Daltile is helping retailers learn about ceramic tile and how to better sell the product through its Internet-based training module, sees a bright future for the segment as well. “While the next three to five years may not get up to same 11% to 12% growth rate the industry saw in the late ’90s,” he concluded, “it is still a growth industry and I expect it to do just that.”