James Lesslie, commercial president, J&J Floors and EF Contract, said he anticipates commercial business to be down 15-20% in the first half of 2021.
Speaking to members of the Fuse Alliance at their virtual annual meeting, Lesslie said for the full year 2020, commercial flooring was down 18-22%.
"The one thing you should remember about 2020 is that there is no longer a national economy. We have regional economies. Those differences are as large and as great as I have seen them in my 35 years in the business."
Carpet and LVT categories commercially were down 18-22%. Carpet was 23-28% down.
"LVT—this is a harder number to get to—was probably 5 to 10% up. A lot of LVT for commercial comes from Korea, and we see residential numbers showing 20 to 25% up for LVT. COVID-19 has helped residential and hurt commercial," Lesslie said. "That was the story of last year."
Full year 2020, the flooring industry 18-22% down for commercial flooring. The fourth quarter was about the same run rate. We were hoping to sed an improvement in the fourth quarter but didn’t happen. Carpet and LVT down 18-22% Carpet was 23-28% down. LVT—this is a harder number to get to—was probably 5 to 10% up. A lot of LVT for commercial comes from Korea, and we see residential numbers showing 20 to 25% up for LVT. COVID-19 has helped residential and hurt commercial. That was the story of last year.
Lesslie forecasts the first quarter of 2021 will be down 15-20% and the mega storm in February did not help business. For second quarter, incorporating normal second-quarter seasonality, he projects commercial flooring to be up 18 to 20%. The first six months of 2021 will be down 15% compared to pre-COVID-19 2021.
Freight continues to be a problem, he said. China continues to take containers and more ocean ships are getting pulled out for service to address new environmental regulations. Ports are backed: there is not enough labor to get the ships unloaded because of coronavirus issue and social distancing. Driver shortages also continue to worsen.
“On land freight, if you were expecting delivery normally, I’d pad most of my planning for a week," he advised.
All that said, Lesslie encouraged Fuse members that they can take share, even in down markets. "I know that because we did," Lesslie said. "We took more share in 12 months than we did in the prior 24. We grew our business versus our competitors. We did it with service, quality—those are the things you can use to drive and take market share."