We are going through a very difficult period as a world and for the first time this global crisis has reached a point that affects our individual lives to such an extent. However, there is a huge sector. Marble needs to be extracted from quarries, processed in factories and reach the end consumer. Although the operation has to continue without interruption, there are topics that need to be discussed due to the crisis.
1- Money is no longer easy to earn
The first issue on the agenda is high inflation and consequently high interest payments. This problem is more prominent in the US and EU markets. Inflation has been forgotten for years. Money is no longer as abundant and easy to earn as it used to be. In some countries, inflation rates are eight times higher than the world average. This was not the case until a few months ago, and the outlook for the next few months does not look good. This is of course worrying news for marble quarries.
2- Energy crisis may grow
We have faced many problems for two years since the pandemic. Logistics, containers… However, the problems do not end with this. The war in Ukraine continues and it does not look like it will end soon. The energy crisis may become a huge problem, especially in the European market.
3- Unemployment crisis is a potential danger
At the moment, there is no problem with unemployment, but this may be a headache in the near future.
4- Qualified labour is a big problem
One of the deepest problems in the sector is the lack of qualified personnel. Companies are trying to solve this by investing in automation and buying machines to close this deficiency in the structure. The number of people trained in this field is insufficient.
Let’s take a quick world tour and start with the European Union:
France 2024 light in the EU
Poland is one of the brightest markets in Central and Eastern Europe. However, inflation and the wars in Ukraine may cause a slight slowdown in the market. Countries such as Hungary and Czechia do not seem to be in trouble. Western European markets are mature markets. In general, they have very good breakthroughs in the fields of restoration and construction. They are also good in public areas. There is a demand for stone. In Germany, there is a breakthrough in renovation and home issues. There seems to be a slowdown until the end of the year. But they have enough work for now. France is the most dynamic market and business has never been better. The 2024 French Olympics may have a share in this, of course. We also observe that things are going well in thick natural stones. The new generation of architects have started to prefer natural materials more in their projects, which is good news for the natural stone industry. Let’s hope that business will continue like this. In some European cities, it is obvious that residential construction will continue in places where nearly 80 thousand people go and settle annually. They create demand, for sure. Portugal is also a very dynamic market. In the United Kingdom, there is a decline on the agenda, but when we talk to stonemasons, they do not seem to be complaining at all. They have enough work. There is no reason to think that this dynamic will change.
3.5 million houses are needed in the USA
Let’s move on to the USA. The most important component of the American market is residential construction. However, there is a serious decline. Some projects are almost paralysed. There is a study that 3.5 million more houses are needed in the USA. Whatever happens, these projects will eventually be completed and finished. This demand must be met. There are other issues related to Covid. People are now looking for big houses. Because they got used to working from their homes with Covid. They also started to move south. They will renovate the vacant offices for new use and increase the number of houses that do not meet the demand in the south. This could be a great chance for natural stone. It is also rumoured that there are problems with payments in the US market. This makes us question whether the USA is really an attractive market. However, we cannot predict everything in advance, we will see what will happen.
South America does not slow down
South America has recovered from Covid incredibly quickly and operations continue unabated. This is good news. Demand is also increasing in countries like Mexico and Colombia. Brazil exported $4.1 billion. But the majority of that is granite. This is a problem for them because a very large part of their market share depends on the USA. They compete only in kitchen countertop applications. They may have problems because they do not have a wide range.
Investments are increasing in India
Let’s move on to India. They have solved most of the internal problems that have prevented the growth of the market for the last 7 years. Construction work continues and many premium projects include precious natural stones. In the mid-segment, projects are continuing rapidly in smaller settlements and cities as well as in the big centres that everyone knows. There is a problem with mining licences in South India, which is a serious problem. We don’t know what the situation will be in 2023, but the market continues to grow. New quarries for marble and other materials are constantly being opened and factories are being built. There is another problem that seems small and insignificant at the moment, but could become much more serious. India also has a very large ceramic/porcelain industry. Increased production activity may cause some problems.
China will not be the same
Let’s move on to China. China was the master of marble quarries in the world. 50 per cent of the total marble sold was allocated for China’s domestic consumption. The bubble got too big and eventually burst. Just as we saw in the US example a few years ago, when such big bubbles burst, it can take 6-7 years for things to recover. Due to the harsh Covid measures of the Chinese government, they will experience a lot of turmoil and chaos in the next two years, but their economy will continue to grow. Construction activities are very dynamic, especially in the business world. However, China will never be at the same level again. It may continue to be a very big buyer, but it will never be the same.
Demand is increasing in Indonesia
Construction activity in South Korea has also been very fast in recent years and may soon enter a slowdown phase. Indonesia is a country of 260 million people and has grown by 5-6 per cent in the past few years. Along with the construction sector, the increasing demand for natural stone is quite obvious.
Arabia benefits Turkey
Now let’s go to the Middle East. We are in the most dynamic region of the world in terms of natural stone demand. Especially Saudi Arabia. The revenues of these countries with energy production reach 1.1 trillion dollars. This is a huge amount. In addition, new cities are being built in Saudi Arabia. Countries like Turkey, Iran and Egypt, which are advanced in marble, will also benefit from this dynamism. There is a very difficult picture to analyse. Mature markets are quite resilient, while there is a visible growth in the markets of developing countries. Things are not going that badly. However, we are going through days when everything can change overnight. It is not so easy to predict how 2023 will be. Prices should not increase. But if things go as they went in 2022, everything will be fine. There will be no problems. Good luck to everyone.
