Ceramic Wall and Floor Tile

SIC 3253

Companies in this industry

Industry report:

This industry covers establishments primarily engaged in manufacturing ceramic wall and floor tile. Establishments primarily engaged in manufacturing structural clay tile are classified in SIC 3251: Brick and Structural Clay Tile, and those manufacturing drain tile are classified in SIC 3259: Structural Clay Products, Not Elsewhere Classified.

Industry Snapshot

Nearly 99 percent of this industry's product share is composed of glazed and unglazed floor tile and wall tile, including quarry tile and ceramic mosaic tile. Because this industry is so focused on decorative tiles, it is completely dependent on the economic health of the construction and remodeling industries. Despite weakening economic conditions in the early years of the first decade of the 2000s, the industry remained strong thanks to historically low interest rates. The resulting housing boom helped keep the ceramic wall and floor tile industry strong throughout the middle of the first decade of the 2000s.

Toward the end of the decade, however, the ceramic wall and floor tile industry, like so many of its counterparts, attempted to streamline as the national economy worsened. The government made efforts to reverse the state of the housing market with further tax incentives, in hopes of spurring demand for wall and floor tiles, but it was not until 2010 that the residential housing market stopped its downward slide. In the meantime, commercial sales and redecorating were profitable channels for the industry. By 2010 the industry was showing signs of recovery in the residential housing market as well as in the ceramic wall and floor tile sector of the industry.

Clay, ceramic, and refractory materials, such as kaolin and ball clay, are the raw materials used in the manufacture of ceramic tiles. Other industrial chemicals, some of which are lead based, are also used to produce ceramic tiles. Because of the industry's use and disposal of these lead-based chemicals, ceramic manufacturers are forced to comply with a wide array of Environmental Protection Agency (EPA) regulations.

Background and Development

The evolution of clay tiles began with the introduction of roofing tiles, followed by flooring and wall tiles. Roman historian Pliny wrote that tiles were invented in Greece on the isle of Cyprus by Cinyra, son of Agrippa. The earliest baked clay roof tiles, which date to around 1800 B.C., were excavated near Argos, Greece. The technique for producing this architectural medium was transported to southern Italy and Sicily and slowly spread throughout the rest of continental Europe. Until the Industrial Revolution when tile making was somewhat mechanized, only the very rich could afford tiled roofs and floors. This is evident in the 89 B.C. Charter of Tarentum, which stated that Senate membership and voting privileges were restricted to those men who owned housing within Tarentum, roofed with at least 1,500 tiles.

The Industrial Revolution forever changed the manufacture of clay tiles, as it did with all industries. By the 1850s, the British led the industry in machinery innovation and heavily influenced production methods in Germany, France, Belgium, Holland, Spain, and Portugal. The introduction of machines to aid in the manufacturing process resulted in dramatically higher production levels and far greater availability of tiles.

The ceramic tile industry in the United States entered its own period of enlightenment in the 1870s. The art form in ceramic tiles developed its own uniquely American twist during the Philadelphia International Centennial Exhibition of 1876. Glazed tiles had been produced in the United States approximately 30 years earlier, however. The progress was documented by Charles Thomas Davis in A Practical Treatise of the Manufacture of Bricks, Tiles and Terra-Cotta, Etc. that was first published in 1884. He wrote, "Nothing in the history of pottery is so remarkable as the progress which has been made in the manufacture of encaustic and decorative tiles, but especially in the latter, in this country since the Centennial Exposition of 1876." However, from 1870 to 1900, many U.S.-produced tiles imitated the styles of Victorian Britain, mainly because many of the artisans were trained either in Britain or directly by the British.

A distinct new generation began to permeate the U.S. ceramic tile industry in the early 1900s. These artisans were trained in U.S. potteries and art schools and were proud of their original, handmade tiles. The leaders in innovation were small companies that created a broad diversity in style and technique. This period was hard hit by the Great Depression beginning in 1929 when the construction industry ground to a halt, and many small tile firms were forced to close their doors.

The design of ceramic tiles changed again with the advent of the Art Deco movement around the time the United States entered World War II. Screen printing became an important method of coloring tiles, and production methods were improved to add great consistency to final tile products.

The value of shipments hovered in the $800 to $900 million range during the 1990s, and the industry hit the billion mark in 2001. However, by 2008 revenue had dropped to $910.3 million as the nation began to struggle through an economic recession.

The tile industry in the United States at the end of the first decade of the 2000s was dominated by international conglomerates like Armstrong World Industries, which owned American Olean Tile. However, much of the artistry in the industry that had sprung up after World War II continued to be stimulated by small tile companies.

The ceramic tile industry is closely tied to both the residential and nonresidential construction industry. In the late twentieth century, ceramic tile was being used for upscale remodeling and the building of bathrooms and kitchens. Although the industry slowed somewhat in the early years of the 2000s due to a weakened economy, it rose again in the middle years of the first decade of the 2000s in conjunction with the housing and remodeling market.

During the middle years of the first decade of the 2000s, the ceramic tile industry faced with several challenges, including the rising price of crude oil and natural gas, which also raised manufacturing and transportation costs, and the increase in interest rates and its subsequent effect on the housing market. A decrease in new housing starts in 2006 and 2007 did not seem to detract from optimism for the hard surface flooring industry as a whole, especially for nonresidential construction and renovation and repair in existing homes. Overall demand was about 9 billion square feet in 2007, led by increases in laminate, wood, and ceramic tile flooring.

However, despite an optimistic outlook for the hard surface flooring industry as a whole, the Tile Council of North America, Inc., reported that ceramic tile consumption was 2.67 billion square feet, down 19.5 percent in 2007 compared to a 1.8 percent gain in 2006. The industry blamed the ongoing economic recession's effect on new residential construction. Meanwhile, companies were focusing on remodeling and commercial markets to boost industry shipments. "If we are going to successfully pull our nation out of recession, we must address housing first," Jerry Howard, CEO of the National Association of Home Builders (NAHB) told National Floor Trends in April 2009. Industry leaders Mohawk and Dal-Tile, among others, stood behind the Fix Housing First coalition, urging Congress to expand the tax incentives included in the first-time homebuyers stimulus package that had been intended to stabilize residential sales.

Current Conditions

The Tile Council of North America reported that U.S. domestic shipments of ceramic tile totaled approximately 617 million square feet in 2010, up about 8 percent from 2009. Domestic consumption also increased during that time, rising about 6 percent to 1.9 billion square feet. Although the economic recession that began in late 2007 had taken a toll on the industry, with shipments dropping to 544 million square feet in 2007, Eric Astrachan, executive director of the Tile Council of North America, projected an optimistic future for ceramic tile in the United States. In the "2010 Ceramic Tile Industry Update" issued on March 14, 2011, Astrachan said, "Despite the difficulty of the past three years, our industry has a history of growth and success, and we fully expect that to continue, but at a lower level in the near future." Astrachan also pointed out that until 2007 ceramic tile consumption had increased 11 years in a row.

Figures from Dun & Bradstreet showed that 643 U.S. establishments were engaged in the manufacture of ceramic wall and floor tile in 2010. These firms generated combined sales of $787 million. California, Florida, and Texas were home to the largest number of manufacturers and together accounted for about 35 percent of all businesses in the industry. Other states with a significant number of establishments in the industry were New Jersey, New York, North Carolina, Ohio, and Washington. In terms of sales, Illinois reported the highest percentage of total sales at about 53 percent.

Industry Leaders

The largest U.S. manufacturer of ceramic tile in the middle of the first decade of the 2000s was Dal-Tile International of Dallas, Texas. A subsidiary of Mohawk Industries since 2002, the company sold its floor and wall tiles under the Dal-Tile and American Olean brand names as well as under its own line of related tile products. The company had 10 plants in the United States and Mexico and employed about 10,000 people. With a 30 percent market claim, Dal-Tile posted 2007 sales of $1.9 billion, and Mohawk Industries posted 2007 revenues of $6.8 billion. Armstrong Floor Products, another industry leader, is owned by Armstrong World Industries, Inc., of Lancaster, Pennsylvania, which had 12,200 employees and 2008 revenues of $3.3 billion.

Workforce

Due to the increase in automation and ongoing downsizing, the number of people employed by the industry decreased through the late twentieth and early twenty-first centuries. The number of employees decreased from 6,482 in 2002 to 5,979 in 2005, according to the U.S. Census Bureau. By 2009 only 4,123 people were employed in the industry. Of these, 79 percent were production workers earning an average of $17.65 an hour. Of all workers employed in the industry, the largest percentage were operatives (45 percent), followed by craft workers (12 percent), officials and managers (12 percent), and laborers (10 percent). Sixty-five percent of industry employees were men and ethnically 67 percent were Caucasian, 23 percent Hispanic, 8 percent black. The remaining 2 percent were other ethnicities.

America and the World

The U.S. ceramic tile industry relied heavily on imports, which constituted roughly 71 percent of total consumption in 2010, or about 1.4 billion square feet. The principal exporters to the United States were Mexico, China, and Italy. At about 42 million square feet, U.S. imports of ceramic tile were much lower at in 2010. More than half of all imports went to Canada, and about 23 percent went to Mexico.

Research and Technology

Production methods for manufacturing ceramic tiles improved greatly after World War II. Machine decoration increased overall output, while improved drying machines allowed tiles to be shipped more quickly. In addition, advances in airless and microwave drying techniques promised to revolutionize the drying process while cutting production time dramatically.

Increasing customer demand for greater variety in styles and uses of tiles broadened the base of techniques used to produce final artistic effects. One of these innovations allowed customers to choose designs for their own bathroom from a computer and see the finished product as a computer simulation. Computers, combined with machine tile decoration, allowed customers to design their own tiles for the manufacturer to produce, albeit at a price. While clay tile making continued to resemble many of the practices used 1,000 years ago, better production methods and materials provided new levels of quality and consistency to the final product.

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