Here's a wish to you for a Happy New Year!
Wait, you say... what makes anybody think it'll be happy, at least for those of us in the wood flooring business? The pundits and corporate leaders in the trade have declared uniformly that 2011 will be a sluggish year for flooring of all kinds (see Floor Covering News dated December 6/13 - http://www.fcnews.net/ ). No particular joy there.
But did you see the copper close today? Copper prices are up 33% for 2010. Other metals prices have been strong too. But copper takes the cake.
So what?, you say. Floors aren't made of copper...
As a former professional trader, I know a few things about copper, and copper trading. Did you know that copper has always been referred to as "the metal with a PhD?" Yes, historically, copper is considered to be the vehicle for the "smart money" forecasts about industrial activity in the coming months. And copper closed the year up 33%!
This is meaningful. Oil closed up as well, gold and silver, other commodities too. But those contracts only have undergraduate degrees. Not copper. Copper has a PhD. Copper knows something.
Maybe copper simply knows that the Chinese are going bonkers industrially. But, everyone knows that! Maybe copper knows that the Chinese industrial juggernaut is going to rub off on the entire world in 2011?
I have another indicator too, a personal one. From many years of supplying and servicing the industrial wood flooring markets (trucks, trains), I have observed that the industrial flooring market turns, up or down, about six months before the general US economy. It's been like clockwork for twenty-five years, through five economic expansions and contractions. And guess what...
That market turned up last August, 2010.
Our commercial and residential wood flooring business turned upward in late November and December, 2010. That other market, the industrial market, is still screaming hot in December, 2010.
Copper, and industrial flooring, and Plantation Hardwood Floors are all shouting, "Happy New Year!"
Showing posts with label wood flooring. Show all posts
Showing posts with label wood flooring. Show all posts
Friday, December 31, 2010
Sunday, September 20, 2009
Getting Out and About
I had a chance to get out and about last week.
The nominal reason was attendance at the annual Hospitality Design Boutique Show in Miami, as a walker, rather than our more normal role as an exhibitor. Trade show participation is expensive, and I'm sure I have plenty of company these days in evaluating where to spend the promotional bucks.
So what did I think of HD Boutique? I was able to have some meetings at the small show, so that means some key people were there. I also missed some meetings (for "nobody's fault" reasons), and couldn't reschedule due to travel plans. So that means some key people were there, but not for long - maybe one day, or even just a few hours. The show is small, and can be navigated in one day or less.
Not one wood flooring company was exhibiting. Our major competitors apparently stayed away in droves. Perhaps that tells a story in itself.
I spent another couple of days in South Florida, looking for signs of commercial life. I didn't find much, at least not at the high-end, where we live. Some large projects are under construction up the coast, but are rumored to be high-priced housing with low-priced components, such as cheapie commodity wood flooring or low-end tile. What consumer would knowing buy into that?
I visited a project using our Plantation custom teak plank and parquet floors, and I got some photos of the installation under way. They're posted on our website in the Gallery.
Even though Florida seems dull (unless we're missing it), other geographies around the nation are more productive. Indeed, our Oxnard factory is now running full blast again - to the point where we needed more skilled folks making our custom floors, and weekly overtime, just to meet our promised lead times!
Imagine that... carefully calculating lead times! And overtime! And hiring! Must say I'm pleasantly surprised, and of course very excited.
I have long predicted that any recovery in flooring orders will exchange one set of problems for another set. My projection has been that raw materials will suddenly get scarce in any recovery scenario, particularly if the pent-up demand we have been expecting manifests itself in orders requiring immediate delivery!
And that is exactly what is happening... many of our new orders are actually old projects now getting funded and transacted. The demand frequently now is that we make custom floors fast! We ourselves can do that, because we own and operate the California factory, rather than outsource our production to China, Europe, or even down the street.
But no manufacturer, including us, controls the stream of manufacturing inputs such as lumber, finish, and add-on machinery. That pipeline of materials is predictably drier than most people expected. Fortunately, we have some defensive wood inventory, and several of our selected suppliers are well-stocked as well. The likely outcome of this situation is that orders will get made from existing raw materials inventories, then will get delayed as the raw materials disappear.
This scenario of depleted raw material pipelines suggests the wisdom of buying now rather than later. Again, I say...
Imagine that!
The nominal reason was attendance at the annual Hospitality Design Boutique Show in Miami, as a walker, rather than our more normal role as an exhibitor. Trade show participation is expensive, and I'm sure I have plenty of company these days in evaluating where to spend the promotional bucks.
So what did I think of HD Boutique? I was able to have some meetings at the small show, so that means some key people were there. I also missed some meetings (for "nobody's fault" reasons), and couldn't reschedule due to travel plans. So that means some key people were there, but not for long - maybe one day, or even just a few hours. The show is small, and can be navigated in one day or less.
Not one wood flooring company was exhibiting. Our major competitors apparently stayed away in droves. Perhaps that tells a story in itself.
I spent another couple of days in South Florida, looking for signs of commercial life. I didn't find much, at least not at the high-end, where we live. Some large projects are under construction up the coast, but are rumored to be high-priced housing with low-priced components, such as cheapie commodity wood flooring or low-end tile. What consumer would knowing buy into that?
I visited a project using our Plantation custom teak plank and parquet floors, and I got some photos of the installation under way. They're posted on our website in the Gallery.
Even though Florida seems dull (unless we're missing it), other geographies around the nation are more productive. Indeed, our Oxnard factory is now running full blast again - to the point where we needed more skilled folks making our custom floors, and weekly overtime, just to meet our promised lead times!
Imagine that... carefully calculating lead times! And overtime! And hiring! Must say I'm pleasantly surprised, and of course very excited.
I have long predicted that any recovery in flooring orders will exchange one set of problems for another set. My projection has been that raw materials will suddenly get scarce in any recovery scenario, particularly if the pent-up demand we have been expecting manifests itself in orders requiring immediate delivery!
And that is exactly what is happening... many of our new orders are actually old projects now getting funded and transacted. The demand frequently now is that we make custom floors fast! We ourselves can do that, because we own and operate the California factory, rather than outsource our production to China, Europe, or even down the street.
But no manufacturer, including us, controls the stream of manufacturing inputs such as lumber, finish, and add-on machinery. That pipeline of materials is predictably drier than most people expected. Fortunately, we have some defensive wood inventory, and several of our selected suppliers are well-stocked as well. The likely outcome of this situation is that orders will get made from existing raw materials inventories, then will get delayed as the raw materials disappear.
This scenario of depleted raw material pipelines suggests the wisdom of buying now rather than later. Again, I say...
Imagine that!
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