Italian tiles report a stagnant 2006

Dec 12, 2006

12/12/06 - The Italian ceramic tile industry is experiencing a period of stagnation. According to the 2006 preliminary figures announced by Assopiastrelle this morning at its annual press conference, Italian companies produced 568.9 million square metres of tiles in 2006 (down by 0.2%).
Total sales amounted to 562.8 million sq.m (+0.5%), of which 392.7 million sq.m consisted of exports (+0.7%) and 170.1 million sq.m domestic sales, which have remained stable relative to 2005.

The most dynamic markets appear to be the new EU members (+6.9%), Eastern Europe (+4.6%) and the Middle East (+7.7%).
The situation is more difficult in the United States due to the fall in the dollar, the crisis in the American property market, strong competition from other producer countries and the growth of the US tile industry.
It is worth noting that Italian groups have substantial shareholdings in US ceramic companies. The fall in Italian output and exports is offset by the more than 100 million square metres manufactured by Italian companies abroad.

2006 was another difficult year from the point of view of company profitability. The analysis carried out for the first time by the Assopiastrelle Study Centre on cost trends during the first half of 2006 shows a 3.78% increase in production costs due to soaring energy prices (heat energy +26.6%, electrical energy +18.12%) and rising labour costs (+3.34% in the first half of the year).

Forecasts for 2007 point to stable production (-0.1%) and a small increase in sales volumes (+0.6%) both in Italy (+0.3%) and to a slightly greater extent in foreign markets (+0.8%).
As regards the main outlet markets for Italian tiles, the small (0.4%) growth in exports towards the EU is very significant firstly because this area accounts for 53% of total Italian exports and secondly because this represents a trend reversal after years of contraction.
Variations in countries such as Germany (+1% in sales of ceramic), France (+0.7%), Benelux (+3%), UK (+4%) and above all the new EU member states (+7.3%) are very significant signals.
The same applies to the recovery in the Middle East and North Africa with expected 3.5% growth. Sales to North America will remain stagnant, while variations in the dollar will play a key role in determining the trends in tile consumption. Distant markets such as Australia and the Far East will remain strong.