Monday, June 1, 2026
Commercial market remains steady, shows promise through the year
By Sharyn Bernard
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Despite broader economic uncertainty, the commercial flooring market has remained resilient, buoyed by steady demand in sectors such as healthcare, education and hospitality, while ongoing project backlogs continue to support business. Industry executives say they expect conditions to stabilize further — and potentially improve — as the year progresses.
“The commercial segment continues to move through a period of transition, but we’re seeing encouraging signs of stabilization as we head into 2026,” said Jeff West, vice president of marketing and design, Shaw Contract. “Where there has been some softness in volume, demand is evolving rather than declining.”
Mohawk Group had a solid end to 2025 and is carrying that growth into this year. “Mohawk Group built momentum through late 2025, securing further soft surface market share by leveraging product innovation and deep ties with dealers and the architecture and design (A&D) community,” said Jeff Galloway, vice president, product management. “This positive trajectory has extended into early 2026, supported by an improving workplace sector.”
The overall market is solid, noted Zack Adamson, vice president, commercial division, Engineered Floors (EF). “The commercial segment has been relatively resilient, but it’s definitely uneven across end-use sectors. We’ve seen continued strength in areas like healthcare, education and certain segments of government, while corporate office and some retail environments are still recalibrating post-pandemic.”
Still, as Noah Fulton, CEO of Karndean Designflooring said, 2026 should remain solid but he does not expect significant growth. “We see this as a year for stabilization rather than breakout growth.”
Commercial groups report that their members’ business is steady. “The first quarter of 2026 was better than expected,” said Geoff Gordon, executive director, Fuse Alliance. “We did come off a slow quarter from last year, but still, activity has been better than anticipated. Strong backlogs should help carry us through the year.”
For Starnet Commercial Flooring, business “continues to show a mixed but promising landscape with some areas remaining in gradual recovery phase, while others demonstrate clear strength and untapped opportunity,” said Mark Bischoff, president and CEO.
And Commercial USA members in 2025 were up low- to mid-single digits and, “although certain segments and product categories performed better, 2026 is building momentum, and 2027 is when the real recovery is going to take place,” said Joe Weber, CEO and COO of ASHG/Commercial USA. “Commercial backlogs continue to grow in Q2.”
What’s driving those opportunities, added Brian Preuss, president of AHSG/Commercial USA, are leading indicators. “Reports show U.S. corporate pretax profits grew 10.5 percent in 2025 — the first major growth since the post-COVID period in 2022 — driven by AI-enabled productivity, lower input costs and pricing power.” He noted that pretax profits lead commercial construction by nine to 12 months.
Pressure Points
Unsurprisingly, the economy, tariffs and global geopolitical issues are putting pressure on the commercial segment. “Elevated interest rates, delayed commercial construction starts, tighter capital spending and broader economic uncertainty continue to impact project timing and overall demand,” said Jon England, senior vice president, contract and trade for HMTX Industries. As well, “ongoing tariff pressures and a rapidly evolving global trade environment are creating complexity in sourcing and pricing, requiring greater supply chain diversification and operational flexibility.”
The overall, volatile macro environment is directly impacting business, noted Galloway of Mohawk Group. “We are seeing constant swings in raw material costs, heavily driven by global oil prices, which are pressuring industrial sectors across the globe. Between tariffs, energy costs and interest rates, it’s a complicated landscape for planning.”
Galloway added that Mohawk Group is focused on operational controls and consistent pricing discipline to manage this, and the company’s domestic manufacturing gives the company a significant advantage. “It gives us the agility to absorb and mitigate these extended pressures much better than if we relied entirely on overseas supply chains.”
Labor issues also continue to plague the business, Starnet’s Bischoff said. “While there is significant opportunity to expand business through new technology and by building new relationships with end users, there remains a persistent challenge of limited labor. Many companies want to grow and capitalize on this window of opportunity, but without the personnel to install the work, that growth quickly becomes difficult to execute.”
Shaw Contract’s West stressed that, “the market is navigating a familiar set of pressures — economic uncertainty, cost volatility and ongoing labor challenges. At the same time, projects are becoming more complex, with more stakeholders and expectations around performance, speed and sustainability.” This creates demand for transparency and partnership. “Customers are looking for solutions that simplify decision-making, reduce risk and deliver long-term value, not just at installation, but over the life of the space.”
In addition, the corporate office landscape continues to change, presenting both challenges and opportunities, noted Weber. “Per CBRE, in 2025 an estimated 23.3 million square feet of U.S. office space was demolished or converted — surpassing new deliveries for the first time in 25 years,” he said. “Over 70 percent of that activity is converting offices to multifamily. That’s a permanent shift in the building stock, and it creates as much flooring opportunity as it removes. The federal government’s recent return-to-office order is also putting bodies back in existing buildings, which drives renovation.”
As well, “The market is also navigating ongoing pricing pressure from imported commodity products, while customers simultaneously expect higher sustainability standards, healthier materials and greater transparency,” said Michael Mathews, senior vice president of commercial strategy for Tarkett. “In addition, the office sector continues adjusting to a hybrid workforce, creating uneven demand across geographies and types of projects.”
Business Booms
The commercial sector still has several areas of growth and opportunities. “With workplace demand gradually returning and institutional segments remaining resilient, there is clear opportunity in the commercial market,” said Anthony Bayne, senior director of commercial sales for Mohawk Group.
“Overall sentiment remains cautiously optimistic for the remainder of the year. Domestic manufacturing is resonating strongly with contractors and specifiers, as companies aim to avoid logistical delays and unpredictable tariff impacts,” said Fred Reitz, senior vice president, sales, commercial for AHF Products. “We’ll remain cautiously optimistic, but realistic.”
Top areas for growth include healthcare, hospitality and education. “Healthcare is a bright spot driven by aging Baby Boomers and demand for hospital and specialty care facilities,” said Weber, noting that medical office buildings, specialty clinics and surgery centers are strong areas. “Education is the second bright spot,” he added, as well as office to multifamily conversions.
“In spite of [the market] challenges, we still see opportunities with renovation activity and public sector and institutional investments, particularly in education markets,” said Adamson.
There also are opportunities for growth through innovation, such as AI. “The adoption of AI and other emerging technologies represents a major opportunity,” Bischoff said. “Over the past year, we’ve seen meaningful acceleration in adoption, but there are still growing pains.”
Proud Partnerships
Commercial groups and brands work to support their members and customers through a number of initiatives, from increasing product availability to training. “Mohawk Group drives dealer growth by equipping our partners to meet this demand through a dual-pronged approach of education and field support,” said Bayne. “This level of collaborative, end-to-end alignment ensures our dealers can confidently execute complex installations and maximize their share of the market.”
England of HMTX said, “We offer a broad range of commercial hard surface solutions through our dealers partners,” from LVT to accessories. “Our emphasis remains on high-performance products that combine durability, design flexibility, ease of maintenance and sustainability.”
Shaw’s West noted that because the majority of the company’s commercial business flows through flooring contractors, “We are deeply invested in helping them grow, differentiate and maximize profitability in an evolving market,” beyond just price and product. “We focus on delivering a comprehensive partnership model centered around business growth, customer experience, operational support and long-term relationship building,” as well as education and collaboration.
Fuse Alliance, “was created to help members grow and improve,” Gordon said. “Best practice sharing is a key component of success for us.” The group holds regular webinars and other training.
Starnet also focuses heavily on education through its Starnet University and other avenues. “In addition, we regularly share insights into emerging industry trends and highlight new offerings within the co-op, including walls, acoustics and other specialty trades that have been added to our vendor network,” Bischoff said. “We are also making significant investments in technology by expanding our network of technology partners.”
Likewise, Commercial USA, “exists to take the things that will win commercial work — leads, credentials, technology, financing, supplier partnerships, peer expertise — and put them within reach of every member at a cost and scale they couldn’t achieve alone,” Weber said.
Technology, such as AI, will continue to impact commercial business.
The commercial sector is healthy.
