Much has been written about the impact of COVID-19 on the wood flooring industry. Each segment of the industry was affected in different ways, both positive and negative. Much of the focus has been on the impact to the residential market. COVID-19 essentially put a stop to all commercial flooring activities due to the closures of offices, government buildings, and schools in 2020.
The stay-at-home mandates and government stimulus payments created a significant and sudden spike in residential consumer demand in many product categories. Consumers now had some “downtime” to focus on themselves and the needs of their immediate families. Many used this time to plan and execute home improvement projects, including the selection, purchase, and installation of solid and engineered hardwood flooring.
Many of the big box retailers were classified as “essential” businesses, and they remained open, with restrictions, during the pandemic. This allowed easy access for DIY customers to obtain wood flooring products for their home renovation project(s). Online ordering assisted the demand boom and provided no-contact options for purchasing and receiving wood flooring and accessories.
Alternatively, many smaller and mid-sized flooring retail operations were forced to close as they were deemed “non-essential” businesses. Many of these operations were able to survive on their own or with financial assistance through the U.S. Small Business Administration’s Economic Injury Disaster Loan and the Paycheck Protection Program during the height of the pandemic. In parallel, state unemployment benefits were bolstered to assist those that lost their income through hardship and business closures. Many small retailers were stalled due to the lack of online ordering capability and accessibility to their product offerings.
The spike in demand, combined with manufacturing plant closures or restrictions and reduced labor availability, quickly created an inventory shortage. Nearly every market producing consumer goods encountered the same challenges. The reduction in labor availability throughout the supply chain, from the forest to the polymers needed to produce adhesives, coatings, and films, lengthened production cycle times of wood flooring products and accessories (some out to six to eight months). This reaction drove inflation, massive transportation disruptions, and transportation price increases. Many parts of the wood flooring supply chain continue to struggle from these issues, and will continue to do so into the foreseeable future.
At certain points in early 2021, wood flooring and accessories manufacturers were reporting that as much as 40 percent of their labor force was lost. This shortage made manufacturing to capacity impossible for many producers and added to the already long cycle times for finished goods.
At certain points in early 2021, wood flooring and accessories manufacturers were reporting that as much as 40 percent of their labor force was lost. This shortage made manufacturing to capacity impossible for many producers and added to the already long cycle times for finished goods. Certain geographies were able to entice new employees with higher hourly wages, signing bonuses, and retention bonuses. Now, with the commencement of supplemental unemployment benefits in the fourth quarter of 2021, the labor force started to rebound.
Every professional involved in the wood flooring industry has a different perspective on how COVID-19 impacted their job or function within the industry. The wood flooring and accessory manufacturers bore the brunt of the pain associated with supply chain issues and labor shortages. Retailers and distributors felt the ripple effect of high consumer demand, but long cycle times to satisfy orders, driving consumer discontent. Flooring installers and refinishers were sent home in many areas due to lack of residential access from quarantine and stay-at-home orders. Corporate employees learned to operate from home offices using virtual video and audio conferencing to conduct essential business operations.
Being a consultant serving the wood flooring and accessories industry, I initially was unsure of what a shutdown would mean to me or many of my colleagues who serve the industry. Expert witness work within the court systems stopped with the closures of the government buildings. Flooring inspections also stopped immediately. As expected, many of my larger manufacturing clients immediately ceased all discretionary spending due to the uncertainty of the pandemic. However, this dismal outlook was tempered quickly by interest from several small- and mid-sized manufacturers looking to accelerate product development on new flooring concepts. These companies realized that they could make up time while some of their competitors conservatively pulled back. During this time in mid-2020, companies on the periphery of the wood flooring industry increased focus and energy on technology developments to provide to the flooring manufacturers.
Until recently, the industry has started to catch up and return to some level of normalcy. Employees are returning, or have returned, to work. Restrictions have lessened, allowing flooring professionals to sell, install, and refinish wood flooring freely. Mitigation of supply chain issues in certain areas has reduced the strain on the freight and transportation segments. It is doubtful that the industry will ever return to the pre-pandemic way of business, but through it all, there have been changes that will benefit the industry. The industry has weathered the “perfect storm” while identifying and rectifying many of its weaknesses through innovation, creativity, and the will to succeed.
Industry Issues in a Post-Covid World
Thursday, April 14, 2022
8:00 AM – 9:00 AM
During the NWFA Wood Flooring Expo, I will lead a discussion about the impacts of COVID-19. I hope you will join me there.
Brian Beakler, Ph.D. is the owner of Beakler Consulting Services, LLC. He can be reached at 717.449.6898 or email@example.com.