Cut Stone & Stone Product Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 1,900 stone products manufacturers in the US cut, shape and finish granite, marble, limestone, slate, and other types of stone for building projects and other uses. Firms may also work with composites, such as engineered stone or solid surface products. Applications for cut stone products include countertops, floors, and walls. Stone fabricators may have in-house staff dedicated to installation, rely on subcontractors, or use a combination.

Competition from Alternative Materials

Natural and manufactured stone compete with a variety of alternative materials, depending on the application.

Dependence on Imports

Stone fabricators are highly dependent on foreign suppliers for dimensional stone.

Industry size & Structure

The average stone products manufacturer operates out of a single location, employs 16 workers, and generates about $2-3 million in annual revenue.

    • According to the Census, the cut stone and stone product manufacturing industry consists of about 1,900 companies that employ about 32,000 workers and generate $5 billion annually.
    • Industry groups estimate the number of stone fabricators in the US could be as high as 8,000 to 12,000. A survey by the Natural Stone Institute found that automated shops employ an average of 38 workers, while manual shops, which tend to be smaller operators, employ an average of 10 workers. Average sales volume was between $2 million and $3 million.
    • The industry is fragmented; the top 50 companies account for 35% of industry revenue.
    • Large, vertically-integrated firms, such as Cold Spring Granite, extract, cut, and finish stone products. Most firms are small and serve a local market.
                                  Industry Forecast
                                  Cut Stone & Stone Product Manufacturers Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Nov 3, 2022 - Uptick in Remodeling Forecast for 2023
                                  • The outlook for remodeling activity – a demand driver for stone building products – dimmed in September but remained positive, according to the National Association of Home Builders (NAHB) /Westlake Royal Remodeling Market Index (RMI). Based on a survey that asked remodelers to rate various aspects of the residential remodeling market as “good,” “fair” or “poor,’ the RMI for Q3 2022 posted a reading of 77, declining 10 points from Q3 2021. (Index numbers above 50 indicate that a higher share of those surveyed view conditions as good than poor.) The overall RMI of 77 points to positive remodeler sentiment due to increases in home equity, ongoing demand for work at home, and an aging housing stock. The NAHB expects a small increase for remodeling activity in 2023, while the rate of new construction is expected to continue to decline.
                                  • The construction market – a driver of demand for cut stone products like countertops – saw builder confidence slip in September 2022 for the ninth consecutive month as the US housing slowdown continued, the National Association of Home Builders (NAHB) reports. Rising interest rates, persistent building material supply chain disruptions, and high home prices all took a toll on affordability. Builder confidence in the market for new single-family homes fell three points in September to 46, the lowest level since May 2014 with the exception of the spring of 2020, according to the NAHB/Wells Fargo Housing Market Index (HMI). All three HMI components declined in September, with current sales conditions down three points to 54, sales expectations in the next six months falling one point to 46, and traffic of prospective buyers down one point to 31. (Any number below 50 indicates that more builders view conditions as poor than good.)
                                  • The 25% tariff imposed in 2018 on most imports from China, including nearly all hard-surfaces, will continue. The Office of the US Trade Representative (USTR) in September 2022 announced that the tariffs will remain in place as part of a four-year review mandated by federal statute. The list of goods under the ad valorem tariffs, imposed under the Trump administration, includes nearly all dimensional natural stone, quartz-surface slabs, and some ceramic tiles, according to Stone Update. The USTR received 356 requests by US-based producers and 76 requests from US trade associations to continue the Section 301 tariffs, which automatically expire after four years unless US producers object. However, the Section 301 tariffs on Chinese goods are being challenged in federal court by, among others, US hard-surface importers.
                                  • Inflation and successive interest rate hikes appear to be quelling demand for kitchen and bath construction, according to the National Kitchen & Bath Association’s Kitchen & Bath Market Index (KBMI), which measures industry confidence. While the index for Q2 2022 still shows growth for kitchen/bath construction, growth is below earlier estimates from the industry group, reports Stone Update. The KBMI came in at 70.4 on a 100-point scale, the lowest since Q4 2020. (An index score above 50 represents industry growth, while under 50 points to a slowdown.) The index indicates that kitchen and bath sales this year are expected to increase by 9.4%, down from the 15.1% reported three months ago. Kitchen and bath sales grew 6.9% from Q2 2021, marking the second consecutive quarterly deceleration in year-over-year sales growth. Also, 59% of design firms and 82% of building and construction firms report either cancellations or postponements of projects.
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