Annual Report: A year of cautious spending, particularly on the residential side, led to a 4% decline in total consumption in the 2024 flooring market – May 2025

Statistics by Market Insights LLC

In 2024, residential flooring consumption fell by nearly 8%, while the commercial market was up marginally, resulting in the overall business being down 4% to $24.29 billion at mill sell, according to Market Insights. Domestic production fell in all categories, and imports were down except for in resilient, the biggest category.

In both the residential and commercial flooring markets, 2024 was a year of tension when it came to spending-from expenditures for home remodeling to major investments by large corporations-with significant hesitancy in a push-and-pull battle with the unyielding and inevitably increasing force of pent-up demand. And that growing pent-up demand in some ways made 2024 more about 2025 and the anticipated return to healthy activity in its second half. Certainly, the need for new flooring is continuing to strengthen this year-deferring only amplifies that need. Right now, the question is whether the volatility in the market, or the aura of volatility, will restrain spending, and for how long. You can’t hold back pent-up demand forever.

OVERVIEW: FLOORING CATEGORIES
Last year, with weakened demand as a result of high interest rates and high inflation, and excess capacity in several flooring categories, pricing pressure led to some erosion at the lower end. On the residential side, for instance, carpet fell more in dollars than in volume. In the builder market, SPC’s weakened position due to reports of product failures, mostly among low-cost, thin Asian imports, led to a competitive market at the low end, with laminates retaking some of the ground the category has lost to rigid LVT over the last decade. And that led to a drop in average square foot prices.

Resilient flooring is the biggest category this year, dominated by LVT. In the residential market, it’s rigid LVT, and SPC in particular, that makes up the bulk of revenues, although 2024 saw increased sales of WPC, thicker SPC, flex LVT and laminates, in part as a response to those SPC failures. Resilient was the only flooring category to show growth last year, with gains of 0.5% pushing up revenues to $7.55 billion. Imports were up, and domestic production was down. Countries like Cambodia, Vietnam, Thailand and India are the emerging producers of resilient flooring in the residential market, and South Korea is still a strong supplier of commercial-grade resilient.

The carpet category was about flat with the total market, and it lost a little marketshare. Mill shipments were down, but imports were up, with a boost in decorative carpet from western and central Asia. Also up was the custom rug business, with manufacturers and retailers increasingly offering the service. The carpet category fell 4.2% to $7.515 billion. Commercial carpet business was down about a point, while residential carpet was closer to 6%.

Area rug business was down 5.1% to $1.86 billion from a revised $1.96 billion in 2023. Domestic production continues to decrease compared to imports. Even Mohawk, the largest rug player in the U.S. market, has now shifted entirely to offshore production.

Ceramic tile was down over 6% last year to $3.75 billion, with domestic shipments falling more than imports, though not by a huge margin. Ceramic tile includes both floor and wall tile. Italy remained the top importer in terms of value. The fastest-growing exporter is India, which has replaced China as the leading source for low-priced tile.

One of the hardest hit categories last year was hardwood, which fell by double digits. It couldn’t compete in the builder market with the exception of custom homes, and domestic hardwood production is suffering due to sawmill closures and competition from imports, which fell much less than domestic production last year.

Laminate flooring outperformed the market last year, down about 2.9% to $1.08 billion, a promising result considering that it doesn’t compete in the commercial market. According to reports, the category has done well in segments of the entry-level home market, like tract homes, taking share from SPC.

On the commercial side, the corporate (workplace) segment, which is the biggest piece of the commercial pie, still has not fully regained its footing, despite the fact that there is some momentum back toward on-site work.

Meanwhile, other commercial segments have been fairly active, including healthcare and higher education, which trended up last year. (For a comprehensive look at this side of the flooring industry, see next month’s Commercial Market Report.)

HOUSING MARKET UPDATE
With the shortage of housing in the residential market, the fates of the different segments are more tightly tied together. Last year, renters weren’t budging from their units. Those that had been considering home purchases deferred in the hopes of lower prices and lower rates, driving down the apartment turns side of the multifamily segment. Multifamily new construction also slowed.

Also, fewer homeowners chose to sell their homes last year. When homeowners sell, it’s usually a guarantee of two or more home renovations. As a result, residential remodel was the slowest segment, down by almost 8%. The single-family builder market fared a bit better, with a lot of regional variability.

Last year, following a bump in February, the existing-home market began to slide, following the same downward trajectory as the previous year but at an even lower rate. But it turned positive in the last three months of the year with both monthly and year-over-year increases. And so far this year, existing home sales are mixed. In January, sales were down from the previous month but still up year over year. In February, monthly sales were up but year-over-year sales were down. And March was down from the previous month and year over year.

New home sales fared a bit better than existing-home sales last year. The sales rate for seven of the 12 months, including November and December, were higher year over year. While January of this year saw new home sales fall 10.5% from December and 1.1% year over year, February was up 1.8% from January and 5.1% year over year. And March was up 7.4% from February and 6.0% year over year. So, it certainly looks like the builder segment is leading residential business again this year, at least for now.

2025 OUTLOOK
Rarely has it been more challenging to assess what the year will bring than it is this year. Just about every flooring executive interviewed for this report replied with some form of a shrug, noting that there are too many unknowns to allow for any meaningful prognostication. Most to the point was Bob Hardaway, vice president of carpet for Shaw: “Don’t overreact.”

Nevertheless, the market is reacting to some degree. According to a New York Times report from the end of last month, “Large importers, including retailers and manufacturers, paused imports from China this month amid an escalating trade war.” The report adds that the number of containers scheduled to arrive at the Port of Los Angeles the following week were expected to be down 35% from the same period last year and also that 25% of the ships scheduled to come into the port in May had been canceled.

The report also details a boost in imports over the past few months in anticipation of the imposition of the tariffs on China.

Over the last few years, the high end of the residential market has outperformed, often posting growth even when the rest of the market shows decreases. This largely reflects the wealthy’s ability to pay for a project without borrowing money. But this year, as the market rises and falls, even the wealthy are unsure where their retirement investments will stand when the dust settles or where we will end up with the threat tariffs and the impact they will have on long-term inflation. That uncertainty is impacting all transactions up and down the economic spectrum.

Activity over the next couple of months, traditionally a busy time, should start to offer some indications of how the year might go. Stay tuned!

For the complete Annual Report, see the May 2025 issue of Floor Focus Magazine.

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