Stonereport: How has the economic downturn affected your business?

Gary Distelhorst: The U.S. stone industry is not immune to the global economic downturn. A spot survey of Marble Institute members suggests that nearly all of our member stone companies have experienced a dip in their business, which has forced most companies to tighten their belts. In fact, nearly three out of four members surveyed told us they have delayed capital investments like new machinery purchases. Many have also been forced to reduce staff.

Stonereport: How much impact has there been on machinery purchases?

Gary Distelhorst: As with every industry, our members are delaying new machinery purchases. The U.S. stone industry has significantly upgraded its technology in the past few years to improve efficiency and productivity. With the economic slowdown, our members seem comfortable using their existing machinery, or if planning to replace machinery are first investigating used equipment on the market (of which there is a huge amount). A spot survey of members suggests that about four in 10 have delayed all machinery purchases, and 85 percent have delayed at least some purchases.

Stonereport: When will the crisis end?

Gary Distelhorst: Our spot survey suggests that two out of three members believe the economy will improve next year. Obviously, a lot of our industry’s business depends on new-home construction. There are signs of improvement, but it’s too early to tell whether increased construction will be sustained. There is also the issue of a huge inventory of previously built, but unsold, new homes. In the future, newly constructed homes in the U.S. will be both more efficient and smaller.

Stonereport: What can machinery manufacturers do to help he industry?

Gary Distelhorst: Not surprisingly, nearly four out of 10 members we surveyed suggested that machinery manufacturers can help the industry by lowering costs of their equipment. But we thought it was interesting that 14 percent told us that machinery manufacturers could help the industry by providing financing for equipment purchases – and another 11 percent said machinery manufacturers should focus on making equipment more efficient.

Stonereport: What will the stone world look like after the crisis?

Gary Distelhorst: There will be somewhere in the neighborhood of 40% - 60% fewer fabrication shops, but those that remain will be more efficient and of generally higher quality, with generally higher business acumen. The industry should be stronger, but the “good old days” of 2005 and 2006 are gone forever, and natural stone fabricators will have to adjust by fabricating other materials, including engineered stone, etc. There will also be a growing commitment to customer choice and customer service.

Stonereport: How are the machinery manufacturers reacting to this change?

Gary Distelhorst: From the vantage point of the U.S. fabrication industry, it appears that the better machinery manufacturers are taking advantage of the downturn by improving machinery technology, offering better training, and are not flooding the market used heavy-handed sales tactics. Some U.S. manufacturers are aggressively trying to get the glut of used machinery out of the marketplace by actually trying to facilitate sales of such machinery.