Officials at Mohawk Industries said they expect material costs will continue to increase and sales will be slack during the third and fourth quarters of 2008.

The statements came Tuesday during a conference call when company officials discussed the floor covering manufacturer’s second-quarter earnings report, which showed that profits and sales were down because of rising materials costs and an anemic housing market.

“The rapidly increasing costs are a demand on margin even as we increase prices to offset these costs,” said Jeffrey Lorberbaum, Mohawk president and CEO. “We expect it to be more of the same in the second half of the year.”

Mohawk’s earnings report showed that earnings during the second quarter of 2008 were about $89 million, down 23 percent from $115 million for the same time in 2007.

Sales, which totaled $1.89 billion, were down 7 percent from $1.98 billion for the second quarter of 2007.

Mr. Lorberbaum said that Mohawk has implemented “aggressive strategies” to improve the situation and will try to buy materials before costs increase further.

“Our crystal ball doesn’t work any better than yours,” he said. “We will adapt our strategy based on the economic climate.”

Kemp Harr, publisher of Floor Focus magazine and Floordaily.net, said Mohawk has increased spending on consumer advertising 50 percent over the last year.

“This market is going to recover and there will be the need for flooring products as it recovers,” Mr. Harr said. “Mohawk is doing a respectable job of building their awareness during a down market, so they will be in a position to take advantage of the recovery.”

Mr. Harr said commercial building, which accounts for about a third of the market, took a hit during the second quarter, but has shown signs of improvement. The soft residential market has not shown any hints of a recovery.

Mr. Lorberbaum also cited rising transportation and energy costs as another factor hurting earnings.

“In the second quarter we have increased product prices and energy surcharges to offset rising costs and more may be required in the future,” he said. “Many cost initiatives are being executed to improve labor productivity, control expenses and reduce energy consumption. We think in the long term it will put us in good position for growth.”

Mr. Harr said Mohawk’s long-term plans appear appropriate in a down economic climate.

“They are making the necessary changes and the right decisions to remain a viable organization,” he said.