Hardwood floors account for about 7% of the flooring market. The U.S. hardwood flooring is a market of about $1.4 billion per year. The market share of tropical hardwood in the U.S. represents less then 10%. In 2005 hardwood flooring consumption in the U.S. reached 49 million m2. Oak (red or white) is the preferred species for wood flooring with almost 80% of the domestic use, followed by hard maple 8.9% and hickory 1.2% and other domestic species. However, there is an increasing demand for exotic wood species.
The market for wood flooring in the U.S. will continue growing at a compound annual rate of 7% from 2006 to 2010, bringing the demand for wood flooring at the end of the decade to more than $3 billion.. Oak flooring will continue to dominate demand with more than 50% of the U.S. market and of which much of the demand is coming from do-it yourselfers.
The U.S hardwood flooring market is highly consolidated, with the top five players holding more than 60% of the market. The market of flooring is extremely competitive. The competition can be divided as follows:
− By type of floor: with the market trends showing consumers moving toward more hardsurface flooring in new homes and renovations, both hardwoods and ceramics will likely continue to take market share away from carpet, vinyl and rubber flooring.
− By type of wood floor. Because the current trend to DIY wood floorings (ease of installation) there is a trend to use engineered flooring rather than solid strip flooring.
− By country. China and Brazil are the benchmark of imported wood flooring. Although there is an important growth in the imports from South American countries, Asian countries are growing faster such as Taiwan and Malaysia.
U.S. manufacturers are concerned about the effect of the current Chinese expansion in the flooring market, anticipating the same effect observed in the furniture industry currently.
Engineered flooring is the most popular segment with the highest market growth (mainly through DIY chains). However, its manufacturing is off reach for SFME in view of being a high capital intensive industry. Best chances for SFME from the tropics appear to be in the prefinished solid flooring segment by using highly durable and decorative tropical timbers.