Some of the logic of the new carpet price increases is that the price of a barrel of oil has more than doubled in the last 5 months. While that statement is true, 5 months ago oil was at about $36 a barrel, down from
around $140 a barrel in the fall of 2008. All of 2008 we had unprecedented price increases on carpets by all manufacturers. As oil fell to the $36 mark, there wasn’t mass price reductions on carpet to account for the record increases just a few months before.
More logic to the latest carpet prices increases “record low levels of demand for carpet”, as one manufacturer put it. I am not an economist, but it seems to me that a sure way to reduce demand further is raise prices in an unstable economy. Carpet has lost a tremendous amount of market share to hard surface flooring such as laminate flooring, hardwood flooring and luxury vinyl tile products. I suspect with higher prices more of the market share will be lost.
