Prices are set to rise

We have seen a series of data that indicate flooring prices are set to rise during the rest of 2007. There are many factors involved here including:

1. The weak dollar can increase costs of imports (for imports from Canada, South America, Europe, China, Malaysia etc…)
2. Increasing demand in the domestic Chinese market which reduces supply globally (or at a minimum reduces manufacturering capacity in that critical market
3. More restrictive raw materials harvesting requirements which is a good thing
4. Higher transport and shipping fees paid by all tiers of the supply chain
5. Increasing container volumes as the Christmas stock will start shipping in the next couple months which causes container rates to increase 10-20%
6. More customs duties being added to many products including laminate, solid hardwood, bamboo, engineered floors and most everything. (adding 4-12% typically.)
7. The increasing costs related to licensing click patent technology for any click related product.

There will always be some aggressive priced items, but recently I see more and more “CHEAP” products rather than value priced.

I saw a “solid oak” at the Domotex Shanghai show recently that the center of the oak was cut out and a filler cheaper wood was put in the middle. I WOULD NEVER put that in my house!

Anyway – just keeping you involved in the META-economics of flooring.