Trends in Education - July 2013

By Jessica Chevalier

The U.S. education sector is at an inflection point. The next decades will bring significantly more students into classrooms in both K-12 and higher education, as a result of both birth rates and immigration. At the same time, many public education infrastructures are aging and badly in need of renovation and expansion, especially in the K-12 market. These combined factors suggest that the education sector, and flooring sales in that market, should be booming.

However, tight state and local budgets are limiting growth, many endowments are less substantial than they were before the recession, and the sequester is bringing cutbacks in federal funding. So while pent-up demand continues to build, flooring manufacturers are forced to take a wait-and-see approach with regard to when, exactly, the bulk of business will start rolling in.

That’s not to say that the education business is in the dumps. Indeed, many manufacturers report that the higher education market is steady, busy, or even very busy. Typically, higher price point flooring is specified in the higher education market; however, K-12 accounts for more of the total market. In 2003, the Energy Information Agency released its Commercial Buildings Energy Consumption Survey, which stated that of the almost 9.9 billion square feet of education buildings in the U.S., 53% is K-12. So, ten years ago, the K-12 market was larger than higher education, and the manufacturers with whom we spoke believe that it remains larger today, maybe accounting for even more total square footage than it did in 2003.

FUNDING
Throughout the recession, there has been speculation about the impact of tight local and federal budgets on K-12 building and renovation work, and the sequester has brought specific, measurable funding cuts to the sector. These cuts are reported to be affecting programs for the most needy of children—programs targeting those living in poverty, special education and Head Start—and they are also impacting facilities.

The sequester brought a 5.1%, or $3.9 billion, cut to elementary and secondary education. Typically, 9% of budgets go to school improvement, according to The Atlantic, so this means an estimated $350 million less in the pipeline annually for building and renovation work due to the sequester cuts.

At the same time, the way that state budgets are funded also impacts the flow of revenue. Because property values have declined in the recession, those states or districts that rely heavily on property tax have seen their revenues fall.

However, after dropping in 2009, federal revenue has been steadily rising over the last few years, closing 2012 at $2.45 trillion. It is expected to rise again this year, so the country’s finances are headed in the right direction. However, Tarkett’s Jeff Krejsa points out that states are increasingly cutting funding for local schools because of greater financial responsibility related to things such as medical expenses, pensions and infrastructure.

As if the current situation isn’t complex enough, according to the U.S. Census Bureau there is a net gain of one person every 15 seconds in the U.S. That means that, by 2015, there will be an estimated 53.5 million children between the ages of five and 18, and, by 2030, 58.1 million school-aged children. That’s an additional 4.6 million children who will need a workspace in a classroom 17 years from now. Considering that the average public school serves 504 students, it will take significant growth to accommodate this increase. Either class sizes will balloon or there will be a significant amount of expansion and building in the public school system over the next years. The solution is likely to be a combination of the two. So, while the K-12 education market is sluggish now, it won’t be able to stay that way.

Population growth will continue in higher education as well, though not at the same rapid clip as we have seen over the last decades. According to the Chronicle of Higher Education, “The department’s report, ‘Projections of Education Statistics to 2021,’ projects that total enrollment in degree-granting institutions will rise by 15 percent from 2010 to 2021, down from a 46-percent increase from 1996 to 2010. Both public and private institutions are expected to see enrollment gains of 15 percent in the coming years.”

Public universities rely in part on public funding, but they have additional revenue streams as well: tuition, endowments, and alumni fundraising, to name a few. Still, public universities can’t spend what they were once able to spend. According to a Moneywatch report, “The cuts in college spending can be severe. Of the states that have dialed back, 36 reduced funding by more than 20 percent, while 11 have slashed it by more than one-third. Arizona and New Hampshire have cut their higher education spending in half.”

To cope with these cuts, universities have to raise tuition and trim spending. In the last five years, the state institutions of Arizona and California have raised their tuition by 70%. Those states are obviously the outliers, but tuition has increased, often significantly, across the board. Says Moneywatch, “Adjusting for inflation, the annual listed tuition at four-year public colleges has risen $1,850, or 27 percent, since the 2007-08 school year, according to the [Center on Budget and Policy Priorities].”

Budget cuts at universities often focus on the less visible targets first, in many cases instructor salaries. Filling classrooms with instructors operating under temporary (adjunct) or one-year positions equates to bottom-line savings from both reduced salaries and benefits. Non-tenure track labor is now the dominant teaching force across state universities. According to Washington Monthly, currently, “about two-thirds of college professors don’t have tenured positions and, if one counts graduate students, about 73 percent of college courses are now taught by people who don’t have tenure.”

However, improving campus facilities often continues—albeit at a slower pace—since an impressive campus attracts more students and, therefore, more tuition dollars. This is especially a trend in dormitories, says Interface’s vice president of market development, Wendell Hadden. No longer are dorms sparse, functional spaces. Today universities are making student residences luxe, cool and comfortable. They are, after all, the first place that a prospective student often visits—and, therefore, the perfect place to woo incoming freshman. Putting on a pretty face is always a boon for public universities, so, whenever possible, they will continue to invest there.

However, it’s worth remembering that many facilities have a thinner maintenance staff than they once had, so a low-maintenance flooring product can be a real boon, especially when the staff that cleans the floor can also be the staff that installs or replaces it, as some modular products enable them to do.

K-12 UPDATE
In the past, many K-12 schools were designed to suit the Charlie Brown-style teaching method, in which the students sit in neat rows of desks, listening to the teacher, who stands in front of them, voicing instruction from one class bell to the next. That’s not today’s education model, so it shouldn’t be today’s classroom design either.

Present day K-12 schools require classrooms that are adaptive to different learning techniques and configurations. Students may need a spot to journal independently one session and, in the next, a meeting space to collaborate for peer reviews of their work. Education today is more hands on, more about teamwork and collaboration than day after day of lecturing. In some ways, it’s the same progression that we’ve seen in the corporate sector, as offices pull their workers out of cubicles and into more engaging work environments, and the same flooring trends are at work there too: more flexibility, more modularity, ease of installation and maintenance.

While VCT, which is the least expensive commercial floorcovering on the market by initial cost, still accounts for the bulk of K-12 flooring, it is losing share as specifiers consider its maintenance profile and overall cost of ownership, says J+J’s David Daughtrey. Whether or not a product other than VCT gets specified often depends on who is making the final decision. If that person can see the full picture—initial costs and maintenance costs—often they choose a product other than VCT. But if the decision maker doesn’t have a view of the maintenance costs and practices, they may revert to whatever product offers the greatest value up front, often VCT. LVT, bio-based tile and carpet tile are all making headway.

Says Krejsa, “The influx of children under the age of 18, the largest generation ever, puts a huge stress on building space and the need for new construction. Yet, many municipalities find it hard to justify new schools in states that have laid off large numbers of teachers. New construction tends to be defined as flexible, handling the influx of new students using new technologies, but also having the capability to convert the space into a more community-based facility once the current influx of students has moved through.”

Not surprisingly, the K-12 market is seeing more renovation work currently, since that is generally less expensive than building. However, some K-12 public school systems are funding their new building projects by issuing bonds and implementing temporary tax increases to pay them off.

Interface’s Hadden claims that, for a long time, hard surface manufacturers used fear tactics to turn specifiers in education away from carpet tile, saying that students would pry up the tile and throw them around like Frisbees. But that fear was not realized.

HIGHER EDUCATION
Higher education is a different animal from K-12, in part because it is comprised of so many different environments. College campuses are, in essence, small cities—in fact, some even have their own zip codes—with nearly every type of space represented: residential, athletic, hospitality, corporate, classroom, laboratory, technical, healthcare, retail and event.

In general, higher education wants flooring that will fulfill the basic needs (durable and affordable), but it has the budget to look beyond VCT. In addition, higher education specifiers often look at full cost of ownership more extensively, says Krejsa.

Hadden reports that he’s seen price points rise a bit in higher education and believes that the green movement may be partially to thank for it, since it has helped increase awareness about the benefits of choosing better quality materials. Along those lines, he reports that more soft surface material is used in higher education, where sound absorption—due to both the high traffic level and the need to create a learning-conducive environment—is especially important.

Often, says Bentley’s Dave Schimsa, universities will flip back and forth between soft and hard surface flooring—prioritizing, with the hard surface choice, cleanability and, with the soft surface choice, sound absorption. In student union buildings and other gathering spaces where studying takes place and creating a learning-conducive atmosphere is key, these concerns are especially significant. While the technology to clean soft surface flooring well certainly exists—and has for almost 30 years—sometimes the maintenance staff is simply more familiar with hard surface cleaning practices, and, therefore, dictates hard surface flooring.

Two areas that offer great opportunity for flooring manufacturers are athletic departments and two-year technical colleges. Athletic departments often pull from a different funding pot than the rest of a university, so they generally have more capital for higher quality finishes, says Schimsa. And two-year colleges—which are increasing in popularity now that it is virtually accepted that an individual must have education beyond a high school degree—are expanding their campuses. Many of these cater to growth in the healthcare field, which is growing and will continue to grow significantly.

Says Jamie Thorn of Forbo, “I haven’t been on a college campus in years that wasn’t expanding.”

One other factor that may impact the higher education sector: the increasing popularity of online education. While these programs will never take the place of the college experience, they provide the opportunity for nontraditional or remote students to earn credits without setting foot in a classroom. Of course, virtual classrooms require no flooring.

SUSTAINABILITY
There is certainly progress on the sustainability front. “Now, everyone is talking about it,” says Thorn. “Ten years ago, or even four years ago, they weren’t.” All agree that higher education is more conscious of green products and practices generally, but whether a sustainable product will, ultimately, be specified depends on both who the decision maker is and where the educational facility is located. If decision makers have a personal commitment to sustainable design, they are likely to make sure that a sustainable product is specified. If not, the chances are greatly diminished.

In certain areas of the country, sustainability is ingrained in their way of living. In other areas, there are differences of opinion among the manufacturers with whom we spoke about whether sustainability is yet a factor on which specifiers are hinging their decisions, but certainly it is more so in higher education. There is a consensus, however, that sustainability is now a part of the conversation, which wasn’t necessarily true only a handful of years ago.

MANUFACTURERS
K-12 is the staple of Forbo’s education business, though the company is currently working to develop its higher education business. Forbo’s 100% bio-based linoleum MCT (Marmoleum composition tile) is its most popular product for the education sector. MCT comes with an occupancy-ready finish, which eliminates downtime at installation as well as concerns about the odors that come with site-applied finishes. When MCT’s finish needs to be renewed (which, on average, is every eight years), the floor needs only to be scrubbed and the finish reapplied. MCT is naturally antimicrobial, and since these qualities are inherent, they will not wear off, as some antimicrobial finishes will. The product also has a high PSI rating for impact resistance and has a 30 to 40 year life, which Forbo reports is especially important today with the increasing body mass of students.

The company’s Dual is a thicker gauge product but with the same characteristics as MCT. Dual comes in two formats (13”x13” and 20”x20”) and has a broad range of color offerings.

While education business has been steady for Tarkett, the company reports that it seems to be a sector constantly on the verge of a breakthrough. Tarkett offers a full portfolio of resilient materials, including vinyl, rubber and linoleum products, to fulfill what it calls the multi-use view of educational space. It has products to meet the demands of gym and sport facilities as well.

Tarkett offers a coordinated and integrated system of accessories as well, including stairwell management products and wall base, so that specifiers can create a comprehensive aesthetic.

Tarkett reports that sustainability is important to its clients and believes that its positions on social responsibility and corporate governance are a boon with customers. In addition, the company notes that customers are seeking products that provide flexibility in design, especially those that reflect school pride with logos and school colors.

Bentley’s education business is a relatively even split between broadloom and carpet tile. Broadloom is often used in administration offices, for example. Carpet tile is a common choice for libraries, since it is both easy to install and replace between the rows of shelving and because of its sound absorption properties. It’s also fairly common in lab areas.

The company reports that loop and textured loop products are some of the biggest sellers in the education market. While a patterned cut pile may be a good choice for reception areas, student areas often lean toward loop products, because they are more durable and hold up better with average maintenance.

Among Bentley’s education clients, sound absorption, air quality, and slip and fall prevention are the top considerations.

J+J Flooring Group is developing new products in carpet tile to suit the education market. Its In Theory Collection, which launched April 25, has three lines. In Theory contains a broad spectrum of colors—brights to muted tones—to suit a variety of educational environments. The products are solution dyed, which means that they are easy to clean and, since the yarn color will not fade, new tile can be mixed with old in an installation. J+J also sells broadloom for use in educational environments.

J+J reports that, in the recession, schools got in the habit of keeping a close eye on their finances—and that continues to this day.

Interface believes that, though sustainability is not necessarily a deciding factor, it is always part of the conversation today in K-12 education specifications. And in higher education, it is most certainly a deciding factor.

Ten years ago, Interface introduced the Interface i2 line of carpet tile to target the education market. The randomly installed product is laid without wet adhesive and produces virtually no waste, only an estimated 2% per job. Interface i2 has over 50 styles to fit any aesthetic. With its mergeable dye lots, specifiers never have to worry about color differences on a phased renovation.

Interface reports that designers like products that make it possible for the floor to become part of the design landscape, which is true of carpet tile.

Armstrong sees four drivers for education sector specifications: performance, budget, design and sustainability. For both sectors, these are the top four concerns, though the weight that the segments put on these factors varies.

In K-12, initial cost is the primary concern, then lifespan, durability and ease of maintenance. For these spaces, Armstrong sells the well-proven VCT as well as its Migrations and Striations bio-based tile, which boast non-PVC content and a high amount of recycled content.

Higher education, which is more flexible in terms of budget, will consider a broader range of products. For those specifications, Armstrong sells VCT; LVT, which is an increasingly used and significant material in higher education; and commercial sheet vinyl, as well as other materials.

Tandus sells products to both K-12 and higher education. In K-12, the company reports, products with solid records of durability are the best sellers. In higher education, durability is also important, but Tandus believes that design is held in higher regard, since universities have to market themselves to students. In both these environments, the company’s Powerbond, a closed cell sheet vinyl with an embedded nylon face, is a popular choice. In universities, it is often chosen for student living areas as well as in high-use areas like dining halls. Carpet tile is frequently used in installations where universities are trying to make a design statement.

Tandus believes that sustainability is frequently a deciding factor in education specifications. However, specifiers are more concerned with durability than with construction details like recycled content. This approach, the company suspects, is being driven by economics. More frequently, specifiers are consulting lifecycle analysis data to make their flooring specifications.

Mannington serves both K-12 and higher education markets with both hard and soft surface flooring products. Its VCT is often specified due to the product’s durability and affordable price point. The company’s broadloom carpet with Integra HP backing, a high performance integrated broadloom backing system with post-industrial recycled content, is also a good fit for the education market. The broadloom is available in 9’ and 12’ widths for corridors and provides an impermeable moisture barrier, eliminates wick-back staining and can be chemically welded to eliminate most transition strips.

Mannington also notes growth in modular carpet, as well as LVT, for education. These are taking share that has traditionally gone to broadloom or sheet products, due to high performance with ease of installation and less waste. This is also true in rubber. The company’s Colorfields product, available in 24”x24” tile as well as sheet flooring, has a thermoset rubber formulation that lasts longer, is safer underfoot and contributes to healthy air quality.

Mannington is currently seeing more renovation in the education market and notes that there is a tremendous amount of pent-up demand, because people have not been spending for the past few years.

Mannington recently purchased Amtico, which makes its LVT flooring in the U.S. With LVT growing in the education sector, this acquisition should be a boon for Mannington in the coming years with regard to its education business.

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