Analyst Stifel Shares its Analysis of NeoCon

Chicago, IL, June 15, 2016—Analyst Stifel attended NeoCon 2016 and issued this report. Regarding the sectors, the analyst believes that, “Overall commercial interiors demand is what we would deem choppy. Corporate is the largest segment within non-residential and while we think the environment is better or less toxic than the start to this calendar year, we would not describe the environment as robust. Hospitality and senior living are pockets of strength. Retail and the education market that is K-12 are still challenging. Corporate revenue growth and jobs are the best leading variables to monitor demand and we still see little economic growth and a recent jobs report that warrants caution.”

On the product side of the business, Stifel sees signs that hard surface is taking share, “While the trend to hard surfaces has been manifest in the residential marketplace for years, we see the share shift in commercial developing rapidly, albeit delayed from the experience in the residential market. There are clear signs that hard surfaces are taking share from carpet. We noted that Tarkett/Tandus' showroom was majority hard surface. Even Interface has announced its intentions to begin selling LVT. Mohawk's showroom incorporated hard surface options desk playing its new capabilities in LVT with its recently acquired IVC facility in Georgia.”

Overall, the analyst summarized the current overall market as follows, “Our best guess is that overall commercial flooring volumes are up very slightly YTD but demand patterns are quite choppy. We think carpet tile growth is modestly positive but broadloom carpet is down meaningfully for flat/slightly down overall carpet demand. Clearly hard surface growth is taking share. We note a recent stay at a Marriott property where the entire room was remodeled in LVT flooring as a prime example of the shift to hard surfaces.”

Related Topics:Tarkett, Interface, Mohawk Industries