Attendance Strong, Attendees Bullish at NeoCon 2017, Says Stifel
Chicago, IL, June 13, 2017-Analyst Stifel released its analysis of the 49th edition of NeoCon, taking currently in Chicago, Illinois.
“Attendance appeared quite strong at the show. While the ABI has been choppy, we found the mood of the attendees quite bullish. From our lenses, the enthusiasm suggests that business quoting activity in the near term should be robust.
“Flooring trends in the U.S. marketplace are clearly moving to hard surface, following the pattern we have seen in the residential market. The leading commercial carpet players which include Shaw Industries (Berkshire Hathaway), Mohawk and Interface were all pushing the integration of hard surfaces with soft surface. This is quite a shift for these companies in the past few years as their focus was either exclusively on soft surface or predominantly so.
“The growth in commercial carpet tile is faster at the middle price points as the high end conversion has largely been completed. Improvements in technology and process have lowered the overall production costs of carpet tile that allows it to be utilized in more applications. Broadloom carpet has been squeezed out and occupies either the very high end or very low end. While carpet tile is still growing domestically , the growth rate has slowed materially to low single digit growth at best which we believe is a function of the mix shift to hard surfaces and the penetration rates the product has achieved at the higher end reaching closer to saturation rates. Despite this fact, significant carpet tile capacity expansion from Shaw, Engineered Floors and Mohawk seemingly reflects their belief the market has room to grow further.
“Carpet raw materials have risen but we believe pricing has been implemented to offset the increases. The recent stabilization of oil prices suggests the rest of 2017 should be relatively benign.”