UK Market and Forecasts for Ceramic and Natural Stone Tiles

                           2007-2013  By Value (£m MSP)

This report covers ceramic & porcelain and natural stone wall and floor tiles that are for internal use only and includes both domestic and contract sectors.

The market experienced only moderate growth 2005-07 with declining ceramic & porcelain wall tiles a major contributory factor. The market then experienced 19% decline 2007-10 as the recession impacted on demand in all key commercial and residential sectors. In 2010, the market was worth an estimated £431 million, having experienced an estimated decline of 6% on the previous year.

As non-essential products, ceramic & porcelain and natural stone tiles have been affected by reduced consumer spending throughout the recent difficult economic climate. The downturn in the housing market has been a key contributory factor with demand from both new housebuilding and RMI work significantly reduced from pre-recession levels. Non-domestic construction has also experienced declining output with key sectors, such as retail and commercial offices, experiencing declining demand 2008-10.

The ceramic & porcelain tiles sector dominates the market in 2010 with estimated value share of around 81%. However, ceramic and porcelain tiles have also been affected by reduced demand for wall tiles as the trend for upstands and metal and glass splashbacks within the domestic kitchen sector continues. Ceramic floor tiles have been more resilient than wall tiles underpinned by demand from the contract sector and the trend for larger format tiles. The domestic floor tiles sector has also derived some limited benefits from the housebuilding sector with floor tiles now offered in increased locations including kitchens, bathrooms, utilities, hallways and cloakrooms.

The natural stone sector has enjoyed stronger market conditions than ceramic & porcelain tiles over the last few years with value decline below that of the total market. Natural stone has particularly benefited from the trend for more luxurious bathroom refurbishments in the upper and middle market sectors.

In terms of supply structure, the market has become more fragmented in recent years with a larger number of stone specialists entering the market with dedicated showrooms and enhanced product ranges.

Prospects for the tiles market into the medium-term will be determined by the strength and pace of recovery of the economy which into Q2 2011 still remains relatively fragile. The short-term outlook indicates only moderate growth at best 2011-12 given the slower than anticipated recovery in the housing sector and the more pessimistic outlook for key commercial sectors such as retail and offices.

Growth prospects 2013-15 are more positive with annual rates of 5-6% currently forecast with value likely to reach around £515m.