In the interior fabrics industry in 2008, the market slumped amid a global recession triggered by the collapse of the sub-prime loan market and the Lehman Shock, and at the same time there was sluggish growth in new housing starts caused by the amendment of the Building Standards Law (the 0.3% increase also fell far short of growth prior to the amendment). With this, the size of the entire interior fabrics market (on a wholesale basis) decreased by 8.3% from the previous year, to 592.0 billion yen.

The market size of the three sectors of the interior fabrics market (on a wholesale basis) was calculated at 212.7 billion yen for window treatments (down 9.3% from the previous year), 277.3 billion yen for floor coverings (down 9.0%), and 102.0 billion yen for wall coverings (down 3.7%).

The size of the entire interior fabrics market continued the trend set in 2007 and fell from the previous figures in all three sectors.

Window Treatments

The size of the window treatment market in 2008 was calculated at 120.2 billion yen for curtains (down 12.6% from the previous year), 31.7 billion yen for blinds (down 3.1%), 35.2 billion yen for screens (down 5.5%), and 25.6 billion yen for curtain rails (down 5.4%), with a total market size of 212.7 billion yen (down 9.3%).

In 2008 the markets for domestically-produced curtains and imported curtains fell substantially, with falls from the previous year of 13.2% and 9.7%, respectively. In terms of domestic products, the sales volume of all products other than lace fell sharply, the same as in the previous year, and there was a double-digit decline for yarn-dyed and piece-dyed products alike. While imported products were affected by deterioration in the domestic market environment, this was influenced by the bulk importing of ready-made products from China and Vietnam.

Looking to blinds, lackluster personal consumption combined with weaker public investment to produce the first decline in five years. In terms of vertical blinds, high-priced fabric slat products seem to have curbed the loss.

Meanwhile, while the market size of roll screens, which had declined for three consecutive years, recorded an increase (up 4.0%) and the market for pleated screens also grew (up 0.4%), the market for Roman shades dropped (down 30.8%), resulting in an overall decline for the fourth consecutive year. Factors behind the increase for roll screens include increased adaptations made for smaller windows and the arrival of high-functionality, low-priced products.

With regard to curtain rails, the market size of decorated curtain rails continued its decline from last year to record a substantial double-digit drop (down 10.1%), with functional curtain rails also declining (down 5.8%). The decline is largely due to the large drop-off in new condominium starts, and was also affected by the ongoing shift from curtains to a variety of screens.

Floor Coverings

The floor coverings (flooring materials) sector is wide-ranging, including three major materials: fiber, plastics and wood. In terms of market size, however, this time we determined the market size of carpets and plastic flooring materials, on which the members of this Association rely heavily, the same as we have in the past.

The market size of floor coverings for 2008 was calculated at 215.5 billion yen for carpets (down 7.4% from the previous year) and 61.8 billion yen for plastic flooring materials (down 14.3%), both showing a decline from the previous year, with a total market size of 277.3 billion yen (down 9.0%).

The market size of carpets continued its decline from last year for both domestic products (down 5.3%) and imported products (down 9.6%), with the 2008 decline much larger than that of 2007. While imported products showed a slight decrease in terms of volume (down 1.6%), in terms of amount the decrease was significant, at around ten percent. In terms of plastic flooring materials, tiles showed a substantial decline in the market size of all of composition tiles (down 24.1%) as well as double-digit declines for other composition tiles (down 12.5%) and homogenous tiles (down 11.5%). The market size for flooring sheets also declined among all types. Particularly affected by a significant decline in condominium properties, slip-resistant vinyl flooring sheets also turned downward (down 11.4%), after recording increases up to last year.

Wall Coverings

In the wall coverings sector, we determined the market size based on wallpaper this time as well.

The market size of wallpaper for 2008 was calculated at 101.99 billion yen (down 3.7% from the previous year). With regard to wallpaper, fire resistant wall materials started to be applied through individual authorization from 2002 onward. Comparisons with the previous year have therefore been possible for each type since 2003.

The total volume of domestic wallpaper shipments recorded a substantial decline not seen in recent years to a total of 642.77 million m² (down 9.2% from the previous year), dipping below the 700,000,000 m² level for the first time in six years. All types showed a decline in shipping volume from the previous year. In particular, the dip was largely influenced by a substantial decline in PVC resin wallpaper (down 9.3%), which accounts for the majority of mass-produced wallpaper. Even in terms of amount, all wallpaper types apart from paper wallpaper showed declines. Olefin wallpaper such as plastic wallpaper, acrylic wallpaper and EVA wallpaper, popular as environmentally-responsible wallpapers, showed a sharper decline than the previous year (down 3.1%), decreasing for the fifth consecutive year. Inorganic wallpaper continued to decline sharply by 21% from the previous year. While accounting for smaller amounts, imported products also declined sharply (down 20.5%). Facing the reality of housing starts at the 800,000 level, business expansion aimed at the sale of high-added value wallpaper and the creation of a demand for repapering is essential.

[Reference Material] Trends in New Housing Starts (By Use)

(Unit: 1,000; figures in parentheses are percentages of the previous year’s figures)

Source: “Integrated Statistics on Construction Work” Ministry of Land, Infrastructure and Transport

[Reference Material] Trends in Floor Area of New Homes (By Use)

(Unit: 1,000m², figures in parentheses are percentages of the previous year’s figures)

Source: “Integrated Statistics on Construction Work” Ministry of Land, Infrastructure and Transport

[Reference Material] Trends in Floor Area for Each Use

(Unit: 1,000m², figures in parentheses are

percentages of the previous year’s figures)

Source: “Integrated Statistics on Construction Work”

Ministry of Land, Infrastructure and Transport

[Reference Material]

Trends in Floor Area for Each Use of Non-Residential Buildings

(Unit: 1,000m², figures in parentheses are percentages of the previous year’s figures)

Source: “Integrated Statistics on Construction Work” Ministry of Land, Infrastructure and Transport

Window Treatments

[Curtains]

When determining the market size of curtains for 2008, the total market size was established by studying_directly inquiring about_the actual conditions of production areas on the basis of an original NIF investigation, which was carried out the same as it was the previous year.

The market size was calculated at 120.2 billion yen (down 12.6% from the previous year).

The market size continued to decrease from the previous year, the same as in 2007, with both domestic and imported products seeing sharp declines, down 13.2% and 9.7% respectively. Imported products were affected by deterioration in the domestic market environment. However, the effect of bulk importing of low-priced products from the likes of China and Vietnam, with their particularly large market sizes, was significant. Meanwhile, in terms of domestic products, there was a significant fall in overall volume apart from lace products, as was also seen in 2007. Both yarn-dyed products and piece-dyed products saw double-digit declines. Contributing factors included reluctance to buy and cooling consumer sentiment caused by deterioration in the domestic market environment. However, it appears that lace products, with their high replacement demand, escaped with single-digit decline. The total domestic production volume of curtains in 2008 decline 7.6% from the previous year, to 112.47 million m², showing an ongoing decline after peaking in 1997. In terms of the social and economic background in 2008, beginning with the failure of major U.S. brokerage firm Leyman Brothers in September, a downturn in the automobile industry and elsewhere due to what was described as a once-in-a-century recession led to stagnant consumption. The housing start statistics published by the Ministry of Land, Infrastructure, Transport and Tourism showed a 0.3% increase from the previous year, to 1,039,180 houses (about 3,600 more houses), but the market weakened by about 20% year-on-year from December 2008 onwards. With regard to the market conditions for curtains, it is true that needs have diversified over the past few years, with an increase in the number of purchasers seeking high quality and high added value. However, it is also true that the number of purchasers attaching importance to price has increased sharply due to deterioration in the market environment.

<Statistical materials used to determine market sizes>

1) Domestic products The market size was determined by calculating average units and the ratio of made-to-order curtains to ready-made products, while referring to reports on actual shipment by NIF members. Based on the data from the “Curtain Shipment Volume and Value by Product Type.”

2) Imported products The market size was determined based on a survey of interior fabric imports by NIF members and the Import Items List by Countries and Items.

*The sizes of the markets for both domestic and imported products are calculated based on average unit prices of products from NIF members, which makes it impossible to verify differences compared to actual prices in the markets.

Table 1. Size of the Curtain Market (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of previous year’s figures)

Table 2. Size of the Domestic Curtains (by type and category, wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of previous year’s figures)

[Reference Material] Curtain Production Volume by Product Category

(Unit: 1,000m²; figures in parentheses are percentages of previous yea’s figures)

[Blinds]

The market size for blinds during fiscal 2008 was estimated at 24.54 billion yen for Venetian blinds (down 3.8% year on year), 7.18 billion yen for vertical blinds (down 0.7%), a total of 31.72 billion yen (down 3.1%).

Brought on by influences such as the amended Building Standards Law, development of the U.S. sub-prime loan problem and steep rises in the cost of raw materials occurring from mid-2007, the economy abruptly lost steam, worsening the industry environment and producing sluggish personal consumption combined with weak public investment that resulted in a lower overall market size for blinds. In terms of vertical blinds, demand for high-priced fabric and wooden slats offset the decreases to result in only a slight decrease overall.

<Statistical materials used to determine market sizes>

1. “Report on the Shipment of Interior Fabrics, etc. (

   2008

   ),” NIF
2. “

   2008

   Statistics on Blinds,” Nippon Blind Industry Association

Table 3. Market Size of Blinds (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of the previous year’s figures)

[Screens]

The market for screens during fiscal 2008 was calculated at 23.31 billion yen for roll screens (up 4.0% year-on-year), 6.66 billion yen for Roman shades (down 30.8%), and 5.19 billion yen for pleated screens (up 0.4%). The overall market size was 35.16 billion yen (down 5.5% over the previous year).

As with blinds, the factors behind the decrease in the market size for screens are believed to be sluggish personal consumption and weak public investment. Looking at screens overall, since Roman shades saw substantial weakness other items performed steadily, but this fell short of the previous year, resulting in an overall decline for the third consecutive year. With regard to roll screens and pleated screens, an increasing trend of adapting to smaller windows due to changes in the shape of house windows has been seen, and particularly with the arrival of high-functionality and low-priced roll screens, on the basis of individual items, increases have been seen for the first time in four years.

<Statistical materials used to determine market sizes>

1. “Report on the Shipment of Interior Fabrics, etc. (

   2008

   ),” NIF

Table 4. Market size of Screens and Shades (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of the previous year’s figures)

[Curtain Rails]

The market size for curtain rails in fiscal 2008 was calculated at 22.77 billion yen for curtain rails themselves (a year-on-year decrease of 6.9%), 1.92 billion yen for curtain rail related products (down 0.5%), and 0.94 billion yen for others (up 38.2%). Despite new housing starts for privately-owned houses bottoming out at a slightly decreased level in fiscal 2008, decorative curtain rails fell to 5.80 billion yen (down 10.1%) due to lower completions for both privately-owned houses and those built by developers, for which housing starts have been on a downward trend. This led to a substantial two-digit decline, continuing the trend from the previous year. The decrease in new detached housing and the sharp decline in construction starts for condominiums in fiscal 2007 has also had an effect on functional curtain rails, which declined to 16.97 billion yen (down 5.8%). Though the implementation of partial price revisions provided a boost, the strong impact from the decline in new housing starts ended up surpassing those gains. The declining trend in curtain rails overall was not only affected by these trends in new housing starts, but also by the shift away from curtains to various types of blinds and screens such as roll screens and vertical blinds. A trend seen in recent years is various companies working to stimulate demand by enhancing their lineups of optional extras, comprising a wide range of accessories to be installed and displayed on curtain rails for homes. While a sense of the economy bottoming out has been seen in some indicators in the second half of fiscal 2009, the downward trend private housing investment has continued. Since the extreme slump in the number of new housing starts is continuing, especially for condominiums, it is likely that the fiscal 2009 market size for curtain rails will also produce dire figures. It will be necessary to properly adapt to the steadily changing needs of the market.

<Statistical materials used to determine market sizes>

1) Materials for determining market size for fiscal 2008 from the Japan Curtain Rail Industry Association

2) New housing starts for fiscal 2008 (Summary), Ministry of Land, Infrastructure Transport and Tourism.

Table 5. Market size of Curtain Rails (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of the previous year’s figures)

Floor Covering Products

[Carpeting]

The size of the market for carpets in fiscal 2008 saw a significant decrease of 7.4%, and is estimated at 215.5 billion yen, comprising 113.1 billion yen for domestic products (down 5.3% year-on-year) and 102.4 billion yen for imported products (down 9.6%). As for the carpet market, while the size of the market declined slightly in the previous year compared with one year prior, before that trend could stop, a sharp decline in the global economy, described as a once-in-a-century occurrence and typified by the so-called Lehman Shock, began to spread. Along with this, the carpet market underwent a drastic contraction not seen in recent years due to the impact on the construction market, the fact that the demand and sentiment towards product upgrades and renovations has fallen off significantly, as well as large shadow cast over the automobile industry. The overall quantity of imported carpets saw a slight decrease (down 1.6%), but in value terms there was a decrease of almost ten percent (down 9.6%), which also had a significant effect on unit prices. As with the previous year, on the basis of the quantity imported from each country of origin, imports from China continued their upward trend to account for over eighty percent of imports, followed by Thailand, India, Belgium and Taiwan, with the top five countries together accounting for around 95% of total imports in terms of volume. In value terms, China, from which the greatest volume is imported, accounted for around seventy percent of the value of imports, with the top four countries excluding Taiwan together making up around 84% of the total. As with last year, the order showed Belgium as the second largest, followed in order by India and Thailand. In the construction market, while new housing starts slightly topped those from the previous year (up 0.3%), the number of starts from last year used as a basis was low due to amendments to the Building Standards Act and the total floor area of construction starts for residential buildings showed a slight decrease (down 1.7%), whereas the total area for non-residential buildings such as commercial facilities and government offices decreased substantially (down 6.6%). In line with this, carpet tiles, which involve the most shipments, showed a decline of almost 5% greater than the previous year. Piece items, which enjoyed healthy sales for a while, continued their downward trend from last year. Roll items and woven rugs that involve construction work also continued to trend downwards. In the automobile market, while production of passenger cars has seen steady year-on-year growth over the past few years, in the current fiscal year numbers fell well below the previous year. Passenger cars make up the greatest proportion of automobiles produced and also often use carpeting. However, from the second half of the previous year the number of passenger cars produced fell far short of the previous year, and a substantial decline was seen in carpeting for automobiles. Additionally, in carpeting for automobiles it seems that there has been a further shift away from tufted carpet to needle-punched carpet for reasons of lower costs. In the market for optional extras, while not to the extent seen in production line carpeting there was a decrease from the previous year, indicating a period where significant changes took place in the area of carpeting for automobiles.

<Materials used for formulating market sizes>

1) For average unit prices: Results of a questionnaire-based survey by NIF 2) For domestic products: “JCM News,” Japan Carpet Manufactures Association 3) For imported products: Trade Statistics, Ministry of Finance Japan

4) Statistics on production, Japan Automobile Manufacturers Association, Inc.

5) Statistics on New Housing Starts for 2007 (Summary), etc., Ministry of Land, Infrastructure and Transport

Table 6. Market Size of Carpets (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of the previous year’s figures)

Table 7. Market Size of Domestic Carpets (by product category, wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of the previous year's figures)

[Plastic Floor Covering Materials]

The total market size for plastic floor covering materials in fiscal 2008 was calculated at 61.8 billion yen, for a year-on-year decrease of 14.3%. Fiscal 2008 saw declines in industry overall caused by a sharp appreciation of the yen, fall in stock prices and the so-called Lehman Shock that was precipitated by the U.S. sub-prime mortgage problems since a year before. However, the construction industry also even greater declines than a year earlier on the due to factors including a decline in new construction sites and a string of bankruptcies among real estate agencies and condominium developers.

Plastic flooring materials include vinyl flooring, linoleum, rubber flooring and olefin flooring. Of these, vinyl flooring materials have the largest share of the market. The market size for vinyl flooring has been broken down into separate categories: composition tiles, other composition tiles, homogeneous tiles, regular vinyl sheets, anti-slip vinyl flooring sheets, cushioned flooring, inlaid PVC sheets and miscellaneous PVC sheets.

“Composition tiles” are the most standard semi-rigid, general-purpose product. As easy-to-install and economical tiles, they are one of the leading flooring materials used in non-residential buildings, such as offices and schools. In recent years, however, with the advent of other types of flooring materials offering superior aesthetic qualities and functionality as well as the decrease in floor area for construction starts, the size of the market has continued to decline in the last few years. The decline seen in fiscal 2008 was substantial, showing a decrease of 24.1% from the previous year.

“Other composition tiles” include those that are soft, semi-rigid, and anti-static for retail and commercial facilities. Manufacturing companies have been selling products with an enhanced design and texture giving them the appearance of marble or wood grain. Despite an improvement over fiscal 2007 in the rate of decline of large-scale commercial facility sites, which factored largely in the overall decline of the market, a 12.5% drop was still seen.

“Homogeneous tiles” are vinyl flooring tiles with a binder component of 30% or more, such as a vinyl resin or an elasticizer. Compared with composition tiles, homogenous tiles offer a richer sense of high-quality and design, and include a variety of products, such as laminated tiles where a printed layer is laminated to produce patterns, inlaid tiles with patterns made by kneading and spraying colored chips, and ready-made floor tiles that can be easily installed on free access floor using a peel-up binding agent. The market size has been on a downward trend each year and declined by 11.5%.

“The “regular vinyl sheet” is a vinyl flooring sheet that is also known as a long sheet with no foam layer. It is highly durable and easy to install, and is used as a flooring material in schools, hospitals, welfare institutions and factories. As with other vinyl-based flooring materials, regular vinyl sheets were unable to avoid the effects of slumping market conditions, but did record the lowest decrease among them, at 4.4%.

“Anti-slip vinyl flooring sheets” are a product with concave and convex areas on the sheet’s surface to enhance anti-slip properties. In recent years, highly-durable and aesthetically pleasing products as well as products specifically for stairways have been accepted in the market, resulting in a steady market over the past few years. However, due to the bankruptcies of real estate agents and condominium developers, fiscal 2008 saw a spate of delayed condominium construction and cancelled plans, reversing trends to result in an 11.4% decline.

“Cushioned flooring” is a vinyl flooring sheet made up of a printed layer atop a foam layer with enhanced aesthetic and decorative qualities. The product also touts its heat-retaining, shock-absorbing and sound-absorbing qualities due to the effects of the foam layer. The product comes in two types depending on the thickness of the surface layer and the total thickness: residential (total thickness 1.8mm, 3.5mm, etc.) and commercial (2.3mm), but in recent years, use of the type with a total thickness of 2.3mm has increased in housing complexes. Due to weak market conditions including a drop in total floor area for new housing starts, the size of the market decreased by 11.7%.

Unlike printed products, since “inlaid PVC sheets” are patterned with multi-colored chips or pellets, they are a highly durable product whose colors and patterns are subject to limited wearing even when the surface is worn away. While they are primarily used in large buildings such as medical, academic and commercial facilities, the account for only a small proportion of vinyl floor sheets. Despite the rate of decline improving somewhat over fiscal 2007, a significant drop of 20.0% was recorded.

“Miscellaneous PVC sheets” are mainly vinyl flooring sheets with a foam layer combined with vinyl flooring sheets given special functionality such as anti-static, antibacterial, chemical resistance or dynamic load-bearing properties. The category also includes fashion vinyl flooring sheets laminated with a print layer. The size of the market started to decline from fiscal 2007 and saw a substantial drop of 30.5% in fiscal 2008.

As for the future outlook, it is hoped that market demand for products and services that contribute to conservation of the global environment will increase. Products which reduce environmental load, comprising mainly those product lines that fall under the Law on Promoting Green Purchasing, have been included in CASBEE (Comprehensive Assessment System for Built Environment Efficiency) assessment items and are increasingly used, and this trend is expected to continue. In addition, there are recycling systems for vinyl flooring materials available as another service, and each of the Interior Floor Industrial Association member companies have made preparations for acceptance.

<Statistical materials used to determine market sizes>

1. Shipment volume: Statistical volume from the Interior Floor Industrial Association

Table 8. Market Size of Plastic Floor Covering Materials (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of the previous year’s figures)

Wall Covering Products

[Wallpapers]

The market size for wallpaper in fiscal 2008 was calculated at 101.99 billion yen, representing a decrease of 3.7% from the previous year. By product category, sales were 2.01 billion yen for “paper-based wallpaper,” 2.12 billion yen for “fiber-based wallpaper,” 88.96 billion yen for “PVC resin wallpaper,” 6.25 billion yen for “plastic wallpaper,” 1.77 billion yen for inorganic wallpaper,” and 0.88 billion yen for “other wallpaper”. Sales of imported wallpaper were 0.70 billion yen (It is difficult to classify imported wallpaper, so the sales figure is included in “other wallpaper”.) The total shipped volume of domestic wallpaper was 642,770,000 m² ‘(a year-on-year decrease of 9.2%), a substantial decline not seen in recent years, and finally dropping below the 700,000,000 m² level for the first time in six years. In the current fiscal year the economic slowdown became clear, with the high price of resources in the first half and collapse of U.S. financial institutions in the second half leading to a worldwide recession, declining corporate profits and in the housing market a string of failures in the real estate industry, primarily among condominium developers. These events also had a significant impact on the interior industry. One of the factors that lead to a rate of decline in the size of the market that was lower than the rate of decline in shipped volume of wallpaper was that transaction prices were raised in unison by between 10 and 15 percent in May in response to the sharp rise in raw materials costs. Unfortunately, prices have since continued to fall due to the deflation in demand for wallpaper that occurred thereafter. The number of new housing starts was 1,039,180 (up 0.3% year-on-year), and the total floor area of construction starts was 151,390,000 m² (down 3.7%). While the number of new housing starts increased once again after the decline of the previous year, in terms of total floor area of construction starts, the decline in that for stores (down 26.9%) stands out. Viewed by category, the substantial decline (down 9.3%) in shipments of PVC resin wallpaper, which is comprised mostly of mass-produced wallpaper, resulted in a decline in volume of 61.64 million m², a drop comparable to the total shipments of other interior products. Sales of plastic wallpaper (olefin wallpaper such as acrylic wallpaper and EVA wallpaper) declined 2.5% from the previous year, recording a softer drop. Paper-based wallpaper (down 1.3%), fiber-based wallpaper (down 8.2%), inorganic wallpaper (down 26.6%) and other wallpaper (down 1.6%) also declined. However, even when totaled these categories account for little more than 2.5% of wallpaper sales overall. PVC resin wallpaper continues to enjoy a high share at 93.2%, considered characteristic of the Japanese wallpaper market. Wallpapers have met substantial demand exceeding 700 million m² in shipment quantity, supported by quality and ease of application. However, facing the reality of housing starts at the 800,000 level, attention should also be given to competition with finishing materials other than wallpaper. With nothing better as a finishing material for walls as vinyl wallpaper, for the sake of breaking through the tendency to attach too much importance to sales of mass-produced products and products mass-produced under contract, business expansion aimed at the sale of high-added value wallpaper and the creation of a demand for repapering is essential. We are confident that together with prosperity in the wallpaper industry, through the interior products we can enrich people’s lives and bring them happiness.

<Statistical materials used to determine market sizes>

Table 9 Market Size of Wallpaper（domestic products, imported products／wholesale basis）

(Unit: 100 million yen; figures in parentheses are percentages of the previous year's figures)

Table 10. Market Size of Wallpaper (by product category, wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of the previous year's figures)

[Reference Material] Wallpaper Production and Shipment

(Unit: 1,000m²; figures in parentheses are percentages of the previous year's figures)