Commercial flooring contracting firms should plan for labor issues this year, according to Engineered Floors COO James Lesslie, who gave an outlook for the industry at the Fuse Commercial Flooring Alliance annual conference held in Memphis, Tennessee. 

"Labor is going to stay a a problem. We're not having massive problems now, but we're having more problems than we should...This summer, when things probably pick up a little bit, I think we're going to see our labor rates up....We think the two things that are going to index most over the next 10 years in our industry are going be labor and energy." 

On the positive side, Lesslie said raw materials should stabilize, and deliveries for commercial carpet and LVT should improve this year. 

"LVT still has a 12-, 14-week supply chain, and maybe 16 depending on which port you're using, so LVT is always going to be a spotty product for everybody," he said. 

To combat issues with LVT supply, Engineered Floors plans to open its domestic LVT manufacturing this summer. The 1.2-million-square-foot Seretean facility in Dalton, Georgia, will utilize the most innovative manufacturing equipment available to produce click LVT flooring for residential and multifamily projects. 

"That offers zero Asian components in the supply chain," Lesslie said.  "Nowadays, there's a lot of concern about what's going to happen over there."

Overall, Lesslie projects carpet and LVT to grow 6% to 10% in 2023, which is down from 10% to 12% in 2022, but unit growth will be higher in 2023.  

There may be one caveat: the residential slow-down in third quarter of 2022 may be an indicator for a future commercial slow down. "There's the urban legend for carpet that 12 to 18 months after a residential downturn, there's a commercial downturn."