Peter’s Corner: 2020 brought the natural stone sector an increased demand from private customers despite the Covid-19 crisis

Peter Becker, editor-in-chief,

Overall, the coming years should also be positive because marble, granite & Co benefit from the eco-trend / However, increased freight costs bring shifts

In 2020, there were positives and negatives for the natural stone sector (there is no stone industry):

1) Private demand for natural stone increased. The money that consumers would normally have spent on travel or culture, they have now invested in beautifying their homes and apartments. We had reported on this frequently, so here is just one figure: while U.S. economic output declined by (-)3.5 % in 2020, there was a (+)3 % increase in private housing investment. That is according to the Joint Center for Housing Studies at Harvard University.

For this reason, in recent months we had shown more examples for the use of natural stone in kitchen, bathroom or garden.

2) Also, with the commercial buildings the stone industry seems to have come well over the year. In any case, the projects that had been started were completed. As for follow-up orders for this year, the positive indications outweigh the negative ones.

However, projects related to tourism and entertainment are on hold. Hotels will not be re-planned for the coming years. At most, there will be modernizations of the existing ones.

The same applies to major infrastructure projects.

For the stone industry, this means that fewer natural stone will be sold in 2021, at least in terms of square meters. In total, however, the reduced volumes should achieve good prices.

3) The transport industry worldwide is completely out of balance. We had analyzed the situation in a report: currently freight costs are extremely high.

The exciting question at the moment revolves around what will happen if costs do not return to pre-Covid-19 levels. Some people are predicting that.

4) The fight against climate change has also reached the stone industry: architects are demanding clear information from suppliers about the carbon footprint of materials. Here, the stone sector is in a very good position. However, it needs to highlight these strengths more clearly in its marketing, as the president of the US Natural Stone Institute told us in a recent interview.

So, all in all:

(a) 2021 could be another good year for natural stone in the home, despite the ongoing Covid-19 restrictions. The challenge for the sector is to branch the demand boom from 2020 into 2021 and perhaps even sustain it.

b) Overall, the sector is benefiting from the increased demand for “green“ products. The challenge remains to communicate this message to the customer.

c) Freight costs will remain high for the foreseeable future. This does not mean that the traveling circus typical of the stone branch will come to an end. However, shipping cheap products will no longer be profitable (at least for the time being). Exporters will have to adopt a new strategy: they will have to sell the commodities, i.e., the commonplace varieties, that they were able to sell abroad with low prices alone, at home. Or they must lower their own prices even further.

d) Special varieties and just as end products will continue to find their markets despite the increase in transport costs. However, they need elaborate marketing to show customers ho to use those materials. Inspiration is the marketing theme here.

e) First and foremost, domestic producers will benefit from the eco-trend. However, in Europe, for example, “domestic has long since ceased to mean only from national production, but rather from one’s own continent. Whereby Turkey is also understood as a European country, at least in this respect.

Thus, on medium term:
* difficult times for the export of cheap products, which had conquered their market only by price;
* good times for special varieties when it is shown what can be done with them;
* good times also for domestic producers;
* overall good mood for stone because it is a natural product.

See also:

(14.04.2021, USA: 04.14.2021)