The floorcovering industry continues to roll out new products and investments, but some of the biggest players in the carpet industry are trimming employment in the Carpet Capital of Dalton, Georgia, as 2019 shows a drop in the softer side of the industry.
Despite the improving economy, carpet shipments have declined this year from the $8.6 billion of wholesale carpet sales last year as consumers shift to hardwood, laminate or tile floorings rather than carpet and rugs. Employment at carpet mills is also being hit by continuing factory automation, which boosts worker productivity and reduces the need for as many workers to produce most carpets.
Shaw Industries, the Dalton, Ga.-based floorcovering subsidiary of Berkshire Hathaway and the world's biggest carpet manufacturer, is cutting jobs at the end of the year as part of a strategic review of its overall staffing. Mike Fromm, chief human resources officer at Shaw, said the company "continually works to align resources with the preferences and needs of the market" and has determined that some jobs can be phased out."
"In our most recent evaluations, we identified opportunities across the enterprise to strategically align resources and assets with where our business is heading in the future, impacting less than 100 associates," he said in a statement.
Fromm noted that the job cuts are a tiny fraction of Shaw's overall workforce of more than 22,000 workers.
"We are optimistic about the future and focused on growth, having invested more than $1.5 billion in U.S. manufacturing operations over the past five years, including numerous expansion and modernization efforts recently completed and currently underway throughout the Southeast," he said.
The Dixie Group, which said its residential carpet sales in the third quarter were down 10.9% from a year ago, also is cutting some of its operations and staff. Last year, Dixie said it eliminated 283 jobs and Dixie expects to cut another 46 jobs or more this year.
Mohawk Industries, the world's biggest floorcovering company headquartered in Calhoun, Ga., also has made some staff cuts in response to industry and market changes.
"We continue to streamline our operations to enhance efficiencies, and we are leveraging automation and process enhancements to lower costs," Mohawk CEO Jeff Lorberbaum said in the company's most recent third quarter report.
The Georgia Department of Labor reported last week that 213 fewer persons were employed in metro Dalton in October than were on the job a month earlier. The drop in jobs during October in Dalton helped push up Dalton's unemployment rate last month by 0.7 percentage points to 4.4% — the highest rate among all 14 metro areas in Georgia.
Over the past six years, employment in metro Dalton has grown by 4,350 jobs since the low point of employment in the aftermath of the Great Recession. But total employment in the Carpet Capital last month remained 7,349 jobs, or 11.8%, below the peak employment reached in 2006.
Floor Focus magazine, a trade publication that covers floorcovering industry, estimates that carpet unit sales so far in 2019 are down 7% from the same period a year ago while dollar volume sales are off 4% from 2018 levels.
"Growth in the overall flooring market is usually 1 percentage point above GDP, but this year growth is at or below GDP," said J. Kemp Harr, publisher of Floor Focus. "We attribute this to an under-performing housing market, and uncertainty among consumers about whether now is a good time to invest in a deferrable big-ticket purchase. Fortunately, the housing market is picking up in the second half of the this year."
Contact Dave Flessner at firstname.lastname@example.org or at 757-6340.