Executive Forecast 2023: Ceramic

We believe commercial will have a strong year as this sector catches up to the residential boom from the last couple years. We know new residential building will slow significantly in 2023 as recent starts are off more than 30% and residential remodel is the most unpredictable. Overall, we anticipate the tile market being off mid-single digits in 2023.

Inflation is predicted to continue to be a headwind in 2023 as raw material and fuel prices keep rising at unprecedented rates. This puts pressure on the whole construction cycle from manufacturing to installation. However, multi-family is looking to be the brightest star in new residential.

The supply chain will most likely continue to be a challenge both domestically and internationally between driver shortages, increasing rates and port congestion. The good news is that many of the products that our brands sell are produced in North America. This helps to mitigate the supply chain issues as much as possible.

The commercial market is predicted to continue its upward trajectory. It was the hardest hit during the pandemic and is expected to hit pre-pandemic levels by 2024. Multi-family should be a bright spot.

Reliability, responsiveness and innovation will continue to be key focuses as we move into 2023. We will continue to work to bring down costs and maximize productivity as we all face the macro-economic factors and challenges together. In our 75^th year, we are committed to maximizing all our resources and attributes to best serve our customers in 2023.

The economy has definitely slowed down the past couple of months. Despite this we do see growth opportunities for ceramic tile in 2023. Our overall belief is that while growth will be significantly slower than the past couple of years, ceramic tile will hold its price better than most other flooring products and thus will have the opportunity to grow overall. So, our belief is it will be low-single-digit growth.

The fed is working to slowdown the economy by an aggressive approach to interest rate growth. This will have the biggest effect on new home construction and new commercial projects. The good news is residential remodel should remain strong for a variety of reasons.

Supply continues to be a major challenge. With the issues in Europe as it relates to the Ukraine conflict, we see ongoing supply chain disruption as it relates to ceramic tile. Luckily, at MSI we have always pursued a multi-sourcing model.

The opportunity is endless for ceramic tile. The biggest opportunity remains the wall.

MSI continues to work on product innovation. We want to make sure we are bringing the right products at the right price points to our retailer customers. We recently launched our Calacatta Mirragio line, which matches one of our top-selling countertop quartz colors. We have seen large success in this and will be continuing this approach of marrying categories.

We are projecting moderate to robust growth in most segments. Some major initiatives to support this growth consist of substantial development of new products, enhancements to online capabilities to provide easier information access to our trade customers and increased market coverage.

Economic uncertainly will continue to remain for an extended period. This certainly will cause consumer hesitancy and delays for making big-ticket commitments. The economic conditions with the rise in interest rates has already influenced new home contracts and the remodel market.

Product availability disruptions affecting production capacities, though alleviating, still exist. Our position is that the major obstacles that confronted all of us are lessening and more manageable. It is expected that this trend will continue, especially if demand declines due to economic conditions.

There will be shifts to segments such as build-to-rent, renovation and remodeling projects. Hospitality and senior living will continue to be strong opportunities. Emser will continue to differentiate itself with innovative and creative products that have specific benefits.

To continue providing the highest level of service to our customers and obtain channel growth opportunities through emerging market business channels and expansion into new markets. Our focus is on e-commerce, B2B services and areas of streamlining/simplification that makes it easier for our customers to do business with Emser.