floor coverings

The value of Chinese floor coverings shipments are forecast to increase at a 7.8％ compound annual rate over the next five years, and climb to the equivalent of $28.1 billion. Chinese floor coverings industry growth is projected to be almost twice the rate seen in the U.S. market over this period. Chinese floor coverings market gains are benefiting from strong economic growth, the population shift to urban areas, rising per capita incomes, and surging residential builder and remodeling markets. China exported US$1.4 billion worth of floor and wall tiles in the 11-month period covering January to November 2004. This was a 27 percent increase over the US$1.1 billion worth of outbound shipments generated in the whole of 2003. Growth, however, is sharpest for foreign market sales. Chinese manufacturers have been able to penetrate world markets by investing in the most up-to-date technology and production processes. This has improved Chinese industry quality and product designs. These investments heightened the competitive environment in an industry already dominated by thousands of small producers. This has put pressure on prices and profit margins, which could result in industry consolidation in the future.