Natural Stone - Granite and Marble, Countertops and Vanity Tops

The Overall Dimension Stone Production-Demand Index was 100 for 1997, 126 for 1998, 144 for 1999, 164 for 2000, 177 for 2001, 189 for 2002, 218 for 2003 (semifinal), and 251 for 2004 (preliminary). To provide perspective, imports accounted for over 80% and domestic granite monument production-Indiana limestone production-domestic slate production accounted for less than 8% of the 2002 Overall Production-Demand Index.

            The Demand Index for Granite Countertops was 100 in 1997, 143 in 1998, 182 in 1999, 263 in290 in 2001, 354 in 2002, 452 in 2003, and 580 in 2004 (preliminary). 2000,

The Demand Index for Granite and Marble Tile was 100 in 1997, 117 in 1998, 123 in 1999, 145 in 2000, 153 in 2001, 169 in 2002, 199 in 2003, and 250 in 2004 (preliminary).

            Foreign-U.S. Competition: The strong Euro is the important story-the Euros per U.S. dollar (average) rate was 0.94 in 1999, 1.09 in 2000, 1.12 in 2001, 1.06 in 2002, and 0.89 in 2003; 0.89 in 3Q 2003, 0.84 in0.880 in 1Q 2004; 0.79 in February 4Q, and

2004, 0.82 in March 2004, and 0.83 in April 2004. These IMF statistics show that foreign producers selling in Euros have lost their competitive advantage in the beginning in late 2002 and it has stayed lost.

            The Canadian-U.S. situation: The Canadian dollar per U.S. dollar (average) was

1.48 in 1998, 1.49 in 1999, 1.49 in 2000, 1.55 in 2001, 1.57 in 2002, and 1.40 in 2003; in 3Q 2003 it was 1.38, in 4Q 2003 was 1.32, and in 1Q 2004 was 1.32. The situation here is much less extreme, but it resembles the Euro situation.

            Outlook for 2004: Overall U.S. Dimension stone sales in 2004 are up nearly 15% on the average from 2003. Some market sectors were major exceptions; granite countertop sales in 2004 were up 28% over 2003. Granite and marble tile sales in

2004 were up 25% over 2003.

            Residential dimension stone sales continued very strong; miracle year after miracle year after miracle year. With regards to interest rates, we shall see if a few rate hikes will or will not slow sales. Probably, yes. Chinese imports are continuing to pressure parts of the granite, monument, tile, and slate markets. The Chinese are starting to strongly compete for stone-using projects, mostly mid-sized projects.

Source: Marble Institute