Peter’s Corner: the great Covid-19 demand boom for natural stone for beautifying private homes is coming to an end

Peter Becker from Stone-Ideas.com.

Evidence is that consumers are flying again and that rates for container shipments are falling rapidly

The natural stone sector was among the winners of the Covid-19 pandemic. Because citizens could not spend on the usual expenses such as culture, restaurants, and, above all, travel, they invested this money in beautifying and upgrading their homes, apartments, and gardens. This happened everywhere in industrialized countries.

In December 2022, however, the party is coming to an end.

The trend reversal can be seen above all from the fact that consumers are traveling again: For several months now, IATA, the umbrella organization of airlines, has been reporting that after the dramatic decline during the pandemic, numbers are again rising just as strongly.

For October 2022, the monthly analysis says: revenue passenger kilometers (RPK) were already back at 74.2% of the level of 2019, i.e. before the pandemic. In September 2022, the figure had still been 73.8%.

Demand for international flights grew particularly strongly.

Consumers around the world participated in this trend, with Asia-Pacific leading the way.

Only China takes an exceptional position here because the government continues to pursue its Zero-Covid policy, which is severely hampering the entire economy, including tourism.

There is a second indicator that supports our thesis that private demand for natural stone is cooling off – freight rates for container transport are falling worldwide, and the queues for transportation vessels in front of international ports are getting shorter.

The situation here was: When private individuals started investing in their properties, there was a sharp increase in the demand for building materials. This demand came first from the U.S., and a little later from Europe.

Due to transport problems, suppliers could not keep up at the time because the lockdowns at Chinese ports had thrown the international freight chains into disarray.

As a result, prices for container shipments exploded.

This is now leveling off again: the prices for transports are falling and the demand for shipping is moving back towards the normal level, is the tenor on the websites of the major shipping companies.

All in all, more money is being spent on travel than on consumer goods.

Another consideration: to what level will private demand for natural stone fall back?

That is impossible to say and depends on how far the stone sector can take advantage of the current consumer trend towards “green“ products.

The marketing activities of many companies and some associations give reason to hope that it will be possible to entice consumers away from engineered stones or ceramics.

Admittedly, domestic producers, in particular, would benefit from this.

As for the global recession predicted by some sources, many factors that do not bode well for 2023 – war in Ukraine, inflation in Europe and the US, energy crisis in Europe, ongoing Covid-19 disruptions in China. Until March 2023, companie’s order books are still well filled. What comes after that, you do not know.

IATA

(04.12.2022, USA: 12.04.2022)