High Growth Forecasted for the US Plumbing Fixtures & Fittings Market

Market Wire, March, 2008

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US Plumbing Fixtures & Fittings Market

US demand to grow 2.6% annually through 2011

US demand for plumbing fixtures and fittings is expected to advance 2.6 percent annually through 2011 to $11.4 billion. Growth will be supported by increasing applications in improvement and repair markets in both residential and nonresidential construction and by an acceleration in new nonresidential construction expenditures. Gains will also be aided by ongoing trends toward larger bathrooms and kitchens in residential markets. These factors will help to offset weak singlefamily housing completions and a moderation in raw material pricing for metal and plastic. US shipments of plumbing fixtures and fittings are forecast to increase marginally through 2011. Gains in plumbing product shipments will lag that of demand as imports - which grew nearly 17 percent per annum between 1996 and 2006 - continue to expand at a rapid pace. The bulk of plumbing product imports will continue to be from Asian manufacturers with lower production costs, who supply products for economy-minded customers, and from European firms looking to expand their reach to aesthetic-minded customers. In addition, producers based in Latin American nations will continue to represent a small, but growing source of imports for the US market.

Demand for fittings to grow at a faster pace than fixtures

Demand for plumbing fittings is expected to expand at a slightly faster pace than its fixture counterpart. Advances will be supported by product developments -- such as a broader pallette of finishes, electronic functionality and universally accessible control design - that will help generate demand for plumbing fittings. Consumer interest in higher-end amenities, particularly those with European influence, will also bolster value growth. Consumer interest in higher-end fixtures - including whirlpool bathtubs, enhanced showers, and hot tubs and spas - across all markets will aid value demand gains for plumbing fixtures. Additionally, product developments aimed at adding value - such as chromotherapy lighting and sound systems - will spur demand. Ongoing consumer interest in nontraditional materials (e.g., glass, concrete or teak) will aid value growth through 2011.

Residential will remain dominant market

The residential market accounted for 69 percent of plumbing product demand in 2006. The segment will not, however, lead advances in the industry through 2011. Growth is anticipated to decelerate significantly from the 2001-2006 period, which was characterized by strong new housing construction. The new housing market is expected to weaken through 2011, highlighted by a decline in singlefamily housing completions. Strong new nonresidential construction spending will nevertheless support plumbing fixture and fitting demand through 2011. Both the residential and nonresidential markets will see solid gains in improvement and repair activity going forward.

Study coverage

It presents historical demand data (1996, 2001, 2006) plus forecasts for 2011 and 2016 by material, type, market, and region of the US. In addition, this study assesses key market environment factors, evaluates company market shares and profiles 32 industry competitors.

INTRODUCTION xiv

I. EXECUTIVE SUMMARY 1

II. MARKET ENVIRONMENT 4

General 4

Macroeconomic Overview 5

Consumer Income & Spending 9

Personal Income & Expenditures 10

Consumer Financing 12

Demographic Trends 16

Building Construction Trends 19

Residential Construction 22

Housing Overview 24

Housing Completions 26

Residential Floor Space 28

Housing Stock 29

Existing Home Sales 30

Households 30

Bathroom Trends 31

Improvements & Repairs 32

Nonresidential Construction 34

Construction Expenditures 34

Improvements & Repairs 36

Manufacturing Outlook 37

Pricing & Product Mix 41

Historical Market Trends 44

Environmental & Regulatory Considerations 47

Plumbing Codes 47

Water Conservation Regulations & Standards 48

Toilet Fixtures 49

Shower Fittings 51

Lavatory Fittings 52

EPA Programs 52

Drinking Water Quality 53

Americans with Disabilities Act 54

III. OVERVIEW 55

General 55

Supply & Demand 57

Foreign Trade 60

Imports 61

Exports 64

World Plumbing Product Outlook 67

IV. FIXTURES BY MATERIAL 69

General 69

Vitreous China 74

Product Characteristics 76

Suppliers 76

Plastics 77

Fiberglass 81

Cast Polymer 83

Acrylic 86

Other Plastics 89

Metal 91

Cast Iron 94

Steel & Other Metals 97

Other Materials 101

V. FIXTURES BY TYPE 104

General 104

Supply & Demand 105

Plumbing Fixture Overview 108

Bathtub & Shower Fixtures 112

Bathtubs 115

Whirlpool Bathtubs 118

Shower Stalls & Receptors 122

Bathtub & Shower Enclosures 125

Sink Fixtures 127

Lavatories 130

Kitchen Sinks 134

Other Sinks 137

Toilet Fixtures 139

State & Federal Regulations 141

Voluntary Performance & Water Saving Programs 142

Water Closet Bowls 144

Flush Tanks 148

Urinals 150

Other Plumbing Fixtures 154

Hot Tubs & Spas 156

All Other Plumbing Fixtures 158

Drinking Fountains 158