ABSTRACT FOR THE CATALINA REPORT ON CERAMIC TILE

SUMMARY OF MAJOR FINDINGS

The U.S. ceramic tile market remains a growing sector of the domestic floor coverings
industry, especially on a volume basis. Volume sales gains are benefiting from a healthy
housing market, favorable demographics, and the introduction of new products. Demand,
however, has been strongly stimulated by declining tile prices and installation costs.
This has made ceramic tile more competitive with other floor covering materials.
Declining product costs are a result of intense competitive pressures among U.S.-
and foreign-based manufacturers. Weak prices, coupled with rising labor and energy costs,
have cut into industry profit margins. Competitive pressures are expected to keep prices
and profit margins sluggish over the next five years, however, declining tile prices will
continue to drive rising demand.

CERAMIC TILE MARKET TRENDS

Catalina Research uncovered these trends in our 180-page report on the U.S. ceramic
tile industry. Report sections cover the U.S. market on a dollar and square foot basis.
Catalina has calculated ceramic tile's position in the U.S. floor coverings industry and the
hard surface flooring market. Catalina also conducted a comparative analysis of ceramic
and other flooring material prices.

SOURCE OF SUPPLY

Separate sections evaluate U.S. shipments and imports. Data is segmented by tile size
and whether the tile is glazed or unglazed. Import shipments are tracked by country of origin.
As part of our analysis, Catalina calculated the U.S. market by country of origin. There is also
an analysis of tile pricing by country source, as well as insurance, freight, and tariff costs faced
by importers. In addition, Catalina reviewed the product strategies of the major competitors
including the introduction of porcelain tiles and stone looks.

END-USE MARKETS AND FACTORS AFFECTING DEMAND

Ceramic tile sales are provided for residential and nonresidential markets and for new construction
and remodeling markets. Brand preferences for new home builders and remodeling contractors are
provided as part of this analysis. End-use market trends are correlated with U.S. housing demand,
nonresidential construction spending, mortgage interest rates, and other economic indicators to
uncover the factors driving demand and provide insights into the direction of domestic demand in
2002 and beyond.

DISTRIBUTION CHANNELS AND CONSUMER DEMOGRAPHICS

Ceramic tile distribution is analyzed by type of outlet. The specialty floor covering store and home
center channels are evaluated to indicate the shifts in industry sales channels. In addition, the role
of the major U.S. floor coverings marketers are evaluated. Catalina analyzed household spending on
hard surface flooring products by household income, age of household head, household size, and
region to point to important target markets.

WORLDS MARKETS AND U.S. EXPORTS

Catalina analyzed the ceramic tile industries of the major supplying countries. The manufacturing
base and domestic demand were reviewed for the Italian, Spanish, Mexican, and Brazilian markets.
U.S. exports are analyzed by product and major country of destination. In addition, Catalina
reviewed the trends in the Canadian market. The report includes Canadian imports by product
and by major country of origin.

COMPETITIVE ENVIRONMENT AND PLANT PROFIT MARGINS

In addition, Catalina Research examined the cost structure and profitability of U.S. ceramic tile
plants. Data trends are compiled for material, labor, and capital inputs. Catalina supplemented
industry data with profiles and sales of leading U.S.- and foreign-based manufactures. Catalina
used this data to calculate leading manufacturer market shares. Company profiles cover product
lines and new products, manufacturing and distribution, capital investments, and acquisitions.
Executives are urged to review the growth- and profit-oriented strategies of leading worldwide
ceramic tile manufactures and compare their company's own performance to the industry
averages.

Date: May 2002	Report Number: CR019
Pages: c.180	Price: $2,250

 

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