As the saying goes, "three gold, four silver". As the weather gradually warms up across the country, the peak season for traditional decoration has arrived. "CCTV Finance" reported a few days ago that more and more consumers are purchasing building materials and consulting decoration plans in the home decoration market. Affected by the increase in demand for decoration, decoration labor is tight and labor costs are rising. In addition, under the influence of various other factors, the current decoration and building materials, both main and auxiliary materials, are increasing in price, and consumers have to increase their home decoration budget.
The price of "full line" decoration has increased, and all-inclusive decoration has become a trend
On April 8, CCTV Finance's "Economic Information Broadcast" column reported that after visiting a number of home building materials markets, the reporter found that the prices of main decoration materials such as wooden floors, doors and windows have generally increased this year. The person in charge of a home furnishing store said that the price increase of plastic steel is about 30% to 40%; the price increase of domestic plates is about 20%; and the price increase of imported plates is estimated to be more than 40%. Affected by international logistics, some furniture dealers have even experienced a double increase in the price of imported panels and logistics costs.
In addition to the main materials, the prices of auxiliary decoration materials such as water pipes, wires, and gypsum boards have also generally increased. A supplier of decoration auxiliary materials said that in the past year, international copper prices rose from 50,000 yuan to 75,000 yuan per ton, and wire prices generally increased by 40%. For wood products represented by gypsum board, due to the increase in raw materials for pulp products, the price of gypsum board in more than 20 cities across the country has increased by approximately 25%.
In addition, with the arrival of the home decoration peak season, decoration workers are facing a large number of starts, workers are nervous, and labor costs are also rising with the increase in demand. The project manager of the engineering department of a home improvement company said that the salary increase of workers this year is between 10% and 15%, especially for bricklayers. The daily salary for this type of work is generally about 500 to 550 yuan per day, for carpenters it is 500 yuan per day, and for small workers it is 350 to 350 yuan. 400 yuan, while a good bricklayer can earn more than 1,000 yuan a day.
The report pointed out that due to the rising prices of building materials, some consumers who originally planned to go to the market to buy building materials themselves began to turn to all-inclusive decoration, hoping to save decoration costs and time through centralized purchasing. Although the prices of building materials have continued to rise in the past three years, many decoration companies have stated that they will not adjust the decoration packages for the time being.price.
Industry insiders predict that second-hand housing transactions will pick up, the demand for renovation of old houses will increase, and customers born in the 1990s will gradually become the main force in decoration, which will further drive the increase in the volume of all-inclusive decoration business, thus resisting to a certain extent Rising raw material price pressures.
Bathroom tile products are stable, why?
It is worth noting that the report pointed out that the prices of main and auxiliary materials for decoration have generally increased, while the prices of bathroom tile products have remained stable. The reason is that domestic brands account for a larger share of sanitary ware and ceramic tile products on the market. Since the domestic supply chain is relatively stable, relatively speaking, the prices of these two types of products currently remain stable.
Since March, many ceramic companies have raised the prices of ceramic tiles/bathroom products due to various factors such as rising raw material and energy costs and increased transportation costs due to epidemic prevention and control. Ceramic tile categories with rising prices include porcelain tiles, antique tiles, medium boards, fully glazed tiles, large boards/rock boards, etc. The price increase range is 5%-10%, covering Guangdong, Jiangxi, Shandong, Sichuan, Hebei, Henan, Hubei and other producing areas.
However, although the prices of many ceramic tile products have increased, the increase has not been large. Due to the increasingly fierce competition in the current market, many ceramic companies are under increasing sales pressure and do not dare to increase prices at will even if the profit margin of their products is very low. Some people in the industry said that the current price increase is only to ease the increasing cost pressure, rather than increasing corporate profits. In addition, at the B-end, where ceramic companies account for a very large proportion of sales, it is even more difficult to increase prices because the price has already been agreed upon when signing the cooperation agreement. In addition, real estate companies and decoration companies are in a strong position in the cooperation.
In the terminal market retail channel, ceramic tile dealers also "say that it is not easy to increase prices." Over the years, the price war in the terminal market has intensified. The retail price of ceramic tiles has dropped again and again. Even so, ceramic tiles are still difficult to sell. Once the price increases, dealers may face the loss of original customers and reduced orders. Therefore, many dealers are under great cost pressure and often give up profits in order to retain customers, and their profit margins are gradually compressed.
Generally speaking, the upstream manufacturers in the ceramic industry have little or no price increase, and downstream dealers are bearing cost pressure. Therefore, the current terminalThe market retail channels are in a stable state.
In 2021, the country will implement the "dual control" policy on energy consumption, causing high-pollution and high-energy-consuming ceramic companies to face the problem of rising production costs. This is also one of the important reasons why most ceramic companies have raised product prices. Under this situation, many powerful ceramic companies have optimized their energy structure by upgrading and transforming production equipment and implementing photovoltaic power generation, thereby reducing production costs and enhancing the brand's market competitive advantage.
For example, Jinduo Ceramics has invested 500 million yuan in upgrading and transforming production equipment, and is expected to invest 80 million yuan in building photovoltaic power generation projects. After last year's preparation and layout, the cost control effect was remarkable. In early March this year, the prices of products that had increased last year were reduced again. Dongpeng Holdings invested 500 million yuan in technical transformation funds within two years to upgrade the production lines of six major bases, successfully reducing the overall energy consumption index by 15%.
The total output value of the home decoration industry declined in the first quarter, and industry confidence was frustrated
Recently released survey data by the Residential Industry Branch of the China Decoration Association shows that in the first quarter of 2022, the output value of leading companies in the home decoration industry will decline by an average of about 10% year-on-year. Amplified to the entire industry, the year-on-year decline is expected to be 25-30%. "Lack of confidence" became the most popular keyword in the first quarter. Home decoration companies generally report that consumers' purchasing power is declining and consumer confidence is insufficient, which is manifested in the longer consumption decision-making cycle, the increase in comparative companies, the reduction in market conversion rate, and even some consumers slowing down in the middle of decoration.
The home decoration market is closely related to the overall sales of the ceramic industry. Since the beginning of the year, due to the turbulent international situation, frequent outbreaks of epidemics, and the continued decline of the real estate industry, the development of the ceramic industry has faced great uncertainty. Putting aside the environmental pressure brought about by the economic downturn, the frequent regional epidemic outbreaks since March have seriously affected the production, transportation and sales of the upstream and downstream ceramic industry: production in ceramic production areas has stagnated; cargo transportation is not smooth, and freight prices have risen. ; Building materials stores are closed and stores are closed.
A ceramic tile brand disclosed the data of its terminal stores across the country affected by the epidemic. There are 168 affected cities, 56 customers in high-risk areas, 143 customers in medium-risk areas, and 86 customers have not opened due to the epidemic. Some ceramic tile brand salesmen said frankly that at the beginning of this year, the terminal market showed a clear improvement trend. The peak season also came earlier, and salesmen also traveled earlier than in previous years. However, a wave of epidemic swept across, and many salesmen traveledBeing restricted and isolated, the signs of market improvement were instantly extinguished, and the confidence of the entire industry was also dampened.
At present, the epidemic situation in many ceramic production areas has gradually been effectively controlled. Jiangxi Gao'an, Shandong Zibo Linyi, Fujian Quanzhou, Guangdong Foshan and other places have gradually lifted their blockades, and ceramic enterprises' sales have gradually returned to normal. This round of epidemic has affected a wide range of people, and it will take some time for the market to recover. The most urgent thing is to boost industry confidence.
When President Xi Jinping delivered a keynote speech at the opening ceremony of the Boao Forum for Asia 2022 Annual Conference, he said that the more difficult the moment, the more confident we must be. To break out of the fog and move towards the light, the most powerful force is to work together.
Although ceramic companies are indeed under great pressure at the moment, they must also exert the spirit of never giving up and strengthen their confidence. I believe that the market will definitely pick up in the second half of the year under the many policies to provide relief and maintain growth.
