By Darius Helm
While conditions have stabilized in various sectors of the commercial market, optimism earlier in the year about a slow and unsteady recovery—yes, that’s what passes for optimism these days—has, over the summer, diminished into a nervous uncertainty. Economic conditions, both globally and here in the U.S., have become increasingly fragile over the last few months, and it is once again unclear when the commercial market can expect to regain its health.Pent-up demand seems to be driving some parts of the commercial market, and it remains true that the corporate sector, buoyed by healthy profits last year, has been trending upward. However, the fundamental issues of high unemployment and a tight credit market continue to stifle growth, and there are precious few signs of any relief in the near future.However, it is worth noting—and has been noted before—that a slow market does not mean no market at all. If the market has fallen 25% in the last couple of years, that still means 75% activity. That’s not to, as they say, put lipstick on a pig, but it means that there’s still a lot of work out there, even if the going is tough and the competition is more fierce than ever.Furthermore, last year the commercial flooring market posted slight gains and it was poised for more growth this year, though we’ll have to wait and see what the final numbers add up to.This year’s survey responses were replete with indications of a continued difficult market. For instance, pricing was a growing concern, vinyl products increased in popularity, and, sadly, environmental concerns among many respondents diminished in importance.On a positive note, it’s been a great year for sustainability developments. The carpet reclamation business is stronger than ever, green fibers are taking the market by storm, and hard surface and resilient producers have also made great strides. And in an ironic twist, this year’s weather related disasters, which many climatologists believe are products of a destabilizing environment, will likely lead to some rebuilding and provide a modest boost in revenues.SECTOR OVERVIEWWe asked designers to name their three biggest projects of the last year and identify them by market category, and this year the sector with easily the most top projects was corporate, followed by healthcare, then education. Historically, the corporate sector has tended to be on top, though healthcare led the way during the two years following the credit crisis, in 2010 and 2009, and education was on top in 2008.According to this year’s surveyed designers, that corporate growth has come from two quarters—tenant improvement and Fortune 500 firms. This correlates well with data gathered from other industry experts, who cite robust growth among the top U.S. and multinational firms, as well as a trend toward renewal of more standard leases. Lease extensions of the last couple of years stifled remodeling efforts, but now that we’re seeing building owners relent and again offer, for example, five-year leases, tenants have started feeling more secure and many have gone ahead and refurbished their spaces. Not so with new construction, which still remains anemic. For the complete survey results, see the October 2011 issue of Floor Focus Magazine.
Copyright 2011 Floor Focus