Hardwood Sees Slow Growth

By Elise Linscott

The Canadian marketplace took a hit in the years following the recession. In 2015, some manufacturers reported that the weakening exchange rate caused them to post price increases, and the high cost of raw materials and drop in oil prices also hurt businesses.

But this year, the Canadian marketplace has seen some recovery, with slow growth over the last year — certain markets like Ontario and British Columbia are booming, while other, more rural areas are still struggling to recover, according to executives.

Brad Williams, vice president of sales and marketing at Boa-Franc, makers of the Mirage brand, said indeed the Ontario market is growing, while the Prairies have slowed.

“The Canadian market is seeing slow growth overall while markets like Toronto and Vancouver continue to see investment due to increased immigration and foreign investors,” Williams said. “Other markets like the Prairies have still not recovered due to oil prices being down over the last two years.”

Michel Collin, director of marketing for Mercier, estimates that over the last year, the Canadian market has seen single-digit growth percentage-wise, and that construction and the overall health of the economy have both been “very good” in the last year.
But Collin said that overall, “(hardwood) has been slow-growing for the Canadian market.”

Collin also added that it’s hard to compare the Canadian market to the U.S. market because of differing business models — for example, Mercier is selling direct in Canada, and through distribution in the U.S.

But while certain urban housing markets like Toronto and Vancouver are thriving and home prices continued to rise, it remains to be seen if this growth in the housing market is sustainable, or if it’s a bubble that will burst.

According to a June 2017 article from Bloomberg News, “On a real basis, Canadian housing prices experienced a much smaller, shorter decrease in prices during the financial crisis and a much larger, longer increase in prices during the recovery. When you couple this unfathomable rise in housing prices with near-record high household debt-to-income ratios, the Canadian housing bubble starts to look scary should the tide turn.”

Wood remains a popular choice
According to Priscilla Bergeron, Lauzon Flooring’s brand manager, the hardwood flooring market is growing not just in Canada, but globally. Bergeron said that countervailing duties haven’t had much impact on the Canadian market, and that hardwood continues to be a dominant flooring material in Canada.

Williams agreed that wood continues to be a popular choice and as consumers are looking for a chic rustic décor, manufacturers have responded by using more reclaimed wood.

“Manufacturers have to work hard to reproduce the aged appearance of the wood compared to a few years ago,” he said. “It is kind of a back to basics. Pale colors, wide boards, brushed looks and ultra-matte finishes are in high demand. Wider and longer boards are trendier than ever too.”

Demand for engineered
A number of manufacturers have said they’ve seen an increase for the demand of 3/4-inch engineered products, “since that type of product allows the consumer to go wider with their planks selection,” according to Mercier’s director of marketing Michel Collin.

As well, Lauzon has seen “a growth in the wood imitation hard surfaces product offering for the consumers who have lower budgets,” brand manager Priscilla Bergeron said.

This post, Hardwood Sees Slow Growth, was originally published on August 16, 2017 on Floor Covering Weekly.

 

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