Economic IndicatorsDecember 2017

General Economy

U.S. GDP Growth

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

GD

P %

Ch

ange

Last 3 quarters:

3Q17: 3.2%

2Q17: 3.0%

1Q17: 1.2%

Source: Bureau of Economic Analysis (Real GDP). Prior quarters subject to revision.

First two consecutive quarters over 3% in 3 years

GDP Global Comparison

Source: IMF World Economic Outlook update as of October 2017 (updated semi-annually)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018E

Mexico 1.4 -4.7 5.1 4.0 4.0 1.4 2.3 2.7 2.3 2.1 1.9

Italy -1.0 -5.5 1.7 0.6 -2.8 -1.7 0.1 0.8 0.9 1.5 1.1

Canada 1.0 -3.0 3.1 3.1 1.7 2.5 2.6 0.9 1.5 3.0 2.1

China 9.6 9.2 10.6 9.5 7.9 7.8 7.3 6.9 6.7 6.8 6.5

Brazil 5.1 -0.1 7.5 4.0 1.9 3.0 0.5 -3.8 -3.6 0.7 1.5

Spain 1.1 -3.6 0.0 -1.0 -2.9 -1.7 1.4 3.2 3.2 3.1 2.5

United States -0.3 -2.8 2.5 1.6 2.2 1.7 2.6 2.9 1.5 2.2 2.3

European Union 0.6 -4.3 2.1 1.8 -0.4 0.3 1.8 2.3 2.0 2.3 2.1

World 3.0 -0.1 5.4 4.3 3.5 3.5 3.6 3.4 3.2 3.6 3.7

• U.S. and world growth rates are expected to improve somewhat in 2017 and continue the

trend in 2018.

% GDP Growth

Unemployment Rate

Source: Bureau of Labor Statistics

Last 3 months:

Sep 2017: 4.2%

Oct 2017: 4.1%

Nov 2017: 4.1%

Selected State Data

(Nov 2017)

Better than average:

Virginia: 3.7%

Florida: 3.6%

Texas: 3.8%

Worse than average:

Pennsylvania: 4.6%

Ohio: 4.8%

Michigan: 4.6%

New York: 4.7%

New Jersey: 5.1%

Nevada: 5.0%

California: 4.6%

Illinois: 4.9%

Other key states:

Georgia: 4.3%

North Carolina: 4.3%

South Carolina: 4.0%

U.S. national unemployment rate

The national rate continues to decline to historic lows. Even states with historically

higher rates such as the west and the rust belt are showing improvement.

Personal Savings Rate

2

3

4

5

6

7

8

Pe

rso

nal S

avin

gs

Rate

(%

)

.

Source: Bureau of Economic Analysis, Monthly Personal Income and Outlays, Table 1: personal savings as a % of disposable personal income.

Prior months subject to revision.

Rates continue to decline and are currently at their lowest point since the financial crisis.

Some concern from economists that rates are too low.

Consumer Sentiment Index

60.0

65.0

70.0

75.0

80.0

85.0

90.0

95.0

100.0

105.0

Source: University of Michigan Survey of Consumer Sentiment as reported in www.tradingeconomics.com. Previous months subject to revision

Last 3 months:

Oct 17: 100.7

Nov 17: 98.5

Dec 17: 95.9

December was slightly weaker than expected, but Q4 average was still high.

Residential Housing Economy / Residential Remodel

Annual Housing Starts

1705

1854

1956

2068

1801

1355

905

554 587 612

784

9281001

11071177 1191

1254

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

(00

0's

Un

its)

NAHB Projection

Growth rates remain positive but are slowing. Multi-family is expected to decline

Source: NAHB Housing/Economic Forecast (projection as of November 2017)

2016 %chg 2017 %chg 2018

Single family: 784 8% 844 8% 911

Multi family: 393 -12% 347 -1% 343

TOTAL 1177 1% 1191 5% 1254

Housing Starts – Seasonal Trend

40.0

50.0

60.0

70.0

80.0

90.0

100.0

110.0

120.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Th

ou

sa

nd

s o

f S

tart

s 2013

2014

2015

2016

2017

Source: U.S. Census Bureau for historical figures; may differ slightly from other published annual figures

Starts (000’s): 1Q 2Q 3Q 4Q Total

2013 208.1 244.2 242.8 229.8 925.0

2014 206.0 274.7 281.4 241.2 1002.9

2015 214.6 320.4 318.0 258.9 1111.9

2016 249.1 322.8 313.0 288.8 1173.7

2017 267.2 327.5 319.3

Starts in the first three quarters of 2017 grew around 3%, growth has slowed since 2016

Existing Home Sales

250.0

300.0

350.0

400.0

450.0

500.0

550.0

600.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Th

ou

san

ds o

f U

nit

s

2012

2013

2014

2015

2016

2017

Source: National Association of REALTORS (www.realtor.org)

Fourth quarter sales are showing an increase over prior years

Sales (000’s): 1Q 2Q 3Q 4Q Total

2014 918 1401 1409 1207 4935

2015 981 1516 1526 1231 5254

2016 1037 1577 1538 1300 5452

2017 1088 1602 1510

Existing Home Supply

1,600

2,100

2,600

3,100

3,600

4,100

0

2

4

6

8

10

12

14

Mo

nth

-En

d S

up

ply

Nu

mb

er

of

Mo

nth

s

Months Supply of Inventory Month-End Inventory (000's)

Source: National Association of REALTORS (prior months subject to revision)

Last 3 months:

Sep 17: 4.2

Oct 17: 3.9

Nov 17: 3.4

Supply has tightened in recent months, dipping back below the 4 month level

Foreclosures

Overall U.S. foreclosures are still at historically low levels.

Illinois and New Jersey continue to lead among high population states

Source: RealtyTrac.com, November 2017

LIRA Remodeling Index

16.6%

Factors in Harvard’s LIRA Index:

• Pending home sales

• Building material shipments

• Contractor sentiment and hours worked

• Cash out refinancing data

• General economic indicators

Remodeling projected to continue to grow in 2018

Commercial Construction Economy

Architecture Billings Index

30

40

50

60

70

AB

I R

ati

ng

ABI Billings Inquiry Index

Nov 2017:

Billings 55.0

Inquiries 61.0

ABI is a leading indicator of future construction activity (50 = no change from prior month)

Index dipped in September but has come back in the last two months

Source: American Institute of Architects (www.aia.org).

Prior months subject to revision

Architecture Billings Index - Regions

30

40

50

60

70

AB

I R

ati

ng

Midwest

30

40

50

60

70

AB

I R

ati

ng

South

Nov: 52.830

40

50

60

70

AB

I R

ati

ng

West

Nov: 54.8

30

40

50

60

70

AB

I R

ati

ng

Northeast

Nov: 52.8

Source: American Institute of Architects (www.aia.org)

ABI is a leading indicator of future construction activity (50 = no change from prior month)

The West picked up in November. Activity is positive in all regions.

Nov: 50.4

Commercial Lending Market

0

50

100

150

200

250

300

350

400

Source: Mortgage Bankers Assoc. (mba.org) Quarterly index: 2001 = 100.

Mortgage Bankers Association commercial loan origination index

2017 is trending higher than prior year with strong second and third quarter performance

Ceramic Tile Industry

U.S. Ceramic Tile Market

$3.2

$2.8

$2.5

$1.9

$2.1$2.2

$2.4

$2.6

$2.9

$3.1

$3.3

$3.5

1.0

1.5

2.0

2.5

3.0

3.5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E

($b

illi

on

s)

+9%

+6%

+12%

Market size approximately $3.5 billion; larger than pre-recession levels.

Source: Floor Covering Weekly; internal estimates. Prior year data subject to periodic restatement.

-13%

-11%

-24%

+7%

+9%

+7%

+6%

+4%

11%

7%

5%

15%

10%

9%

7%

3%

8%

6%

8%

14%

10%

7% 7%

5%

9%

6%6%

9%

8%

5% 5%

4%

0%

5%

10%

15%

2010 2011 2012 2013 2014 2015 2016 2017E

New Res Res Remodel Commercial

U.S. Market by Segment

Total =

+9%

Total =

+7%

Total =

+12%

Total =

+9%

Total =

+7%Total =

+6%

Total =

+6%

Note: Industry data from prior years is subject to periodic restatement.

Total =

+4%