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

                                  Mar 6, 2023 - Builder Optimism Rises
                                  • Decreasing mortgage rates are fueling gains in home builder confidence, HBS Dealer reported in February. Builder confidence in the market for newly-built single-family homes increased 7 points to 42, according to the latest National Association of Home Builders/Wells Fargo Housing Index (HMI), released in mid-February. February marked the second consecutive month of gains in builder confidence, according to NAHB. “With the largest monthly increase for builder sentiment since June 2013, the HMI indicates that incremental gains for housing affordability have the ability to price-in buyers to the market,” said NAHB Chairman Alicia Huey. While the February HMI reflects growing optimism, the NAHB notes that builders continue to battle high construction costs and supply chain issues when it comes to materials. Homebuilding activity drives demand for cut stone and stone products including tile, brick, and granite and marble countertops.
                                  • US crushed stone production was about 1.5 billion tons – valued at more than $21 billion – in 2022, essentially unchanged compared with 2021, according to the US Geological Survey's National Minerals Information Center (NMIC). Apparent consumption of crushed stone increased to 1.6 billion tons last year due to growth in the construction market. Commercial and heavy-industrial construction activity, infrastructure funding, labor availability, new single-family housing unit starts, and weather affect rates of crushed stone production and consumption. Long-term increases in construction aggregates demand are influenced by activity in the public and private construction sectors, as well as by construction work related to US infrastructure improvements, according to NMIC. The underlying factors that would support a rise in prices of crushed stone are expected to be present in 2023, especially in and near metropolitan areas. Texas is the top state for crushed stone production followed by Florida and Missouri.
                                  • More than two-thirds of economists at 23 major financial institutions expect the US to have a recession this year, The Wall Street Journal reports. The economists cited warning signs including the declining housing market and tightening of lending standards by banks. After raising interest rates seven times in 2022 and again in early February 2023 -- to a range of 4.5 to 4.75% -- Federal Reserve officials have signaled they plan to keep raising rates to between 5% and 5.5% this year. Ongoing rate hikes are likely to further depress demand for housing, including new home construction – a demand driver for tile, countertops, and paving stones. However, a majority of the economists who expect the US economy to contract are predicting a “shallow” or “mild” recession and expect the economy and US equity markets to rebound late in 2023.
                                  • The Institute for Supply Management’s December 2022 Semiannual Economic Forecast for the US manufacturing sector calls for a 5.5% net increase in overall revenues in 2023, compared with a 9.3% increase reported for 2022. “Manufacturing’s purchasing and supply executives expect to see overall growth in 2023,” said the chair of the ISM’s manufacturing business panel Tim Fiore, adding “They are pessimistic about overall business prospects for the first half of 2023, but project growth returning in the second half.” The US manufacturing sector contracted in November after growing for 29 consecutive months (June 2020 through October 2022). Overall, revenue increased for manufacturers in 2022. Sixty percent of ISM respondents said revenue was better than 2021, increasing on average 17.7%.
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