To start 2023, Stone Update Magazine subjected politely solicited a few industry leaders to a short quiz about expectations for the year. You can see the results here; however, in all fairness, I decided to subject myself to the same questions. The problem with predictions is that they often don’t pan out for a variety of reasons, and there’s no reason why I shouldn’t share the hot seat if forecasts go a bit awry. Some of this harkens back to the late 1980s, when I covered financial news for a weekly metropolitan business publication. A number of prominent local economists came out with annual business forecasts, and the TV stations and daily newspapers did the usual “here’s what the experts say” articles. I went for some perspective. Along with the standard look-ahead coverage, I went back and detailed the predictions from all of the economists for the previous two years. For a few days after publication, my editor fielded calls from irate economists. No, I didn’t call them fools in the article; they earned that designation themselves. Previous predictions strayed far from what really happened and, out of five economists, only one came close to getting a forecast near the target. I’ve also missed the mark on annual predictions. A few years ago, I wrote in the January-February edition that the failure of U.S. Marble wouldn’t be an omen of difficult times. I even put that in the headline. The year was 2020. Boy, did I get that wrong. So, here’s my take on our industry questionnaire for this year. Q: What are the two biggest things in your business that you plan to keep a close eye on in 2023, and why? I’m not the owner of a fabrication shop (nor do I play one on TV), but my concerns might closely match yours: sources of revenue and margin. Pretty basic, yes, but not simple. Sources of revenue boils down to my basic customer pool and what they’re buying. After a year of worries about inflation and recession, I’m not going to see many new clients from different industries jumping into the market. I see the mix as much the same as the past few years. In publishing, we tend to book most of our business just before the beginning of the year as people finalize their annual budgets. More than a few potential customers out there are stretching that budgeting process into January and February – and that shows me that people are still being cautious (if not unsure) about 2023. Margin in 2022 became The Incredible Shrinking Factor with inflation and cancelled orders, causing a rethink about how we price products. This isn’t a discussion anymore about straight-up profit markups because of the variables we’ve experience with our vendors. If levels of return are still based more on need rather than want, business progress this year will be tough. Q: Will the U. S. hard-surface market go: Up? Down? Stay nominally flat (+/- 5%)? Why? I’ll divide that question in two, since I closely follow hard-surface imports: there’s product value and product volume. Let’s take volume first. My hope, of course, is that it goes up. My insight from following import data – remember, the United States imports more than it produces with hard surfaces – is that the market will be nominal and possibly down a point or two. This is not a terrible result. Even with its first-half lockdown disaster, 2020 showed a marked increase in business overall from the previous year, and rose dramatically in 2021 and 2022. That kind of growth curve is never going to last long. Nominal performance in 2023 is an adjustment to a maturing market. Hard surfaces are premium products that last longer than anything else in a residential or commercial environment, save for structural walls and roofs. People don’t come into the shop to trade granite for ultra-compact like they switch iPhones and car-insurance companies. We’ve managed to increase customer appetites in the past few years and build market awareness. Hopefully, that turns into consistent demand. As for value – that’s going to increase. If it doesn’t, and we still have inflation running at 4% or better, we’ll have serious problems with margins and, unfortunately for some, survivability. Q: What’s the most-important thing you learned in 2022? You can always learn to improve the use of your tools. OK, mine are digital and not diamond-tipped, but I found ways to get better performance, which led to better products in less time – which is a significant gain in margin with labor cost. Part of that also involved not hesitating to upgrade. Again, it’s not like $400,000 for a new machine in the backshop for me, but improving and replacing production equipment brought progress in product quality that I didn’t even consider as part of the buying process … but it’s paying off daily in 2023.