SIC 3281
CUT STONE AND STONE PRODUCTS



This category covers establishments primarily engaged in cutting, shaping, and finishing granite, marble, limestone, slate, and other stone for building and miscellaneous uses. Establishments primarily engaged in buying or selling partly finished monuments and tombstones, but performing no work on the stones other than lettering, finishing, or shaping to custom order, are classified in either the wholesale or retail trade divisions. The cutting of grindstones, pulpstones, and whetstones at the quarry is classified in the mining division.

NAICS Code(s)

327991 (Cut Stone and Stone Product Manufacturing)

Industry Snapshot

Dimension stone sales expanded steadily during the late 1990s as construction markets boomed. Shipments were valued at $1.63 billion in 2000, compared to $1.24 billion in 1997. The cost of materials grew from $451 million to $564 million between 1997 and 2000. Over the same time period, employment in the industry increased from 13,109 to 15,903.

Organization and Structure

The three main materials utilized in this industry are granite, marble, and limestone. Granite products accounted for more than 50 percent of industry output in the 1990s. Granite is a light-colored rock—usually found in mountainous regions—that is comprised primarily of varying amounts of quartz and feldspar. About half of all cut granite is used in buildings, the remainder being consumed to create monuments and miscellaneous products.

Marble, which represented approximately 20 percent of production during the 1990s, is also used mostly in buildings. It is metamorphosed limestone and is usually quarried from the core of young mountains in the Rockies or from the exposed roots of ancient mountains in the Appalachians. The presence of impurities and other minerals during metamorphosis is responsible for the many colors and streaks found in different types of marble. Its strength and appearance make it a popular stone for statuary and decorative applications.

Limestone, a sedimentary rock, is comprised primarily of calcite that resulted from the sedimentation of coral and dead organisms. Limestone varies greatly in texture and color. Although most limestone is crushed for use as agricultural lime or cement, cut limestone is often used as building stone. Limestone products, almost all of which are building stone, accounted for about 10 percent of industry shipments during the 1990s. Aside from the three major stone products groups, miscellaneous cut stone comprised the remaining almost 20 percent of sales. Slate, for example, is commonly used in construction and to make items such as billiard tables and chalkboards.

Dimension stone is usually removed from open pits in rectangular blocks, although some rock is mined from tunnel-type quarries. A channeling machine is used to cut softer rocks, such as limestone, marble, and sandstone, into blocks that are removed by cranes and hauled away. The rock may also be cut by wire sawing, which involves pulling a wire surrounded by an abrasive slurry back-and-forth along the stone.

From the quarry, the stone is hauled to a processing plant where it is cut, shaped, polished, and/or coated. Most dimension stone is finished into masonry veneer for use as fascia on buildings. The stone veneer is anchored to a structural frame or backing, often giving the impression that the structure is built with stone blocks. A significant portion of cut stone is shaped and finished into surfaces for floors, walls, tables, and counters.

Background and Development

Dimension stone was quarried as early as Egyptian times. The Egyptian pyramids were built from quarried stone in about 2800 B.C.; the largest pyramid contains 2.3 million blocks with an average weight of 2.5 tons. The Babylonians used cut stone in 600 B.C. to build the renowned Hanging Gardens. The Greeks and the Romans also used cut and finished stone widely as construction, decorative, and statuary material. In fact, the Greeks quarried marble as early as 447 B.C.

Stone was quarried in America as a building and paving material before the Revolutionary War. But the U.S. cut stone industry lagged behind European production until the development of a railway system during the mid-1800s. Mechanized cutting and finishing tools and methods during the late 1800s and early 1900s significantly boosted industry activity, as did the building boom of the 1920s. Early U.S. stone structures include St. Patrick's Cathedral (1879) and the Cathedral of St. John the Divine (started in 1892 and completed in 1996), both in New York City.

Although stone remains an important building material, new construction materials and methods developed during the twentieth century have limited its use almost entirely to a finishing element of mostly decorative value. Steel frames and concrete have particularly infringed on conventional uses of stone. Furthermore, new synthetic materials have replaced stone in many decorative and functional applications, such as counter tops, wall coverings, and architectural ornamentation. Many synthetic substitutes with the look and feel of marble or granite are less expensive, more durable, and easier to manufacture, ship, and install than real stone. Nevertheless, stone is still a popular and cost-effective building material for many indoor and outdoor construction projects and consumer products.

Although synthetics and glass became popular building materials during the 1980s, an escalation in commercial construction spurred cut stone industry expansion. Sales climbed from about $900.0 million in 1988 to almost $1.3 billion in 1996. Despite slow building activity during the 1990s, revenues continued to ascend to nearly $1.5 billion by 1996. Shipments were valued at $1.3 billion in 1997. Furthermore, increased interest in stone building materials, as opposed to concrete and glass, continued to buoy sales into the middle of the decade.

Many cut stone and stone product companies were crunched by the construction slowdown of the 1980s and early 1990s. As demand slowed, prices dropped and profit margins slipped as a result of overcapacity and increased competition. Most industry segments were stable, however. Granite producers, for example, were achieving greater demand at the expense of marble. Marble had been losing market share since the 1980s when it was determined that most varieties are affected by acid rain. Although granite producers were fighting stiff foreign competition, the use of granite for headstones and monuments remained strong, and a construction industry uptick in the mid-1990s bolstered the bottom line for many competitors.

Some companies were also benefiting from productivity gains implemented during the slowdown. The industry had succeeded at increasing its workforce only 25 percent during the 1980s as its shipment value surged almost 80 percent. New automated cutting and finishing equipment, as well as advanced transportation and information systems, were credited with increasing efficiency. But while some producers had been able to boost profitability through automation, stone cutting remained a labor intensive industry susceptible to imports from low-cost emerging nations. India, for example, made steady inroads into the U.S. granite industry throughout the 1990s.

Current Conditions

The long-term industry outlook was generally lackluster for the early 2000s. Limited opportunities for further productivity gains, coupled with greater foreign competition, were expected to hurt many industry sectors. Although traditional domestic markets, such as construction, experienced expansive growth in the booming economy of the late 1990s, superior synthetic substitutes continued to make gains. Due to the strength of the construction industry in the late 1990s, the cut stone industry did experience steady growth between 1997 and 2000, when the value of shipments increased from $1.24 billion to $1.63 billion.

Because of stone's weight-to-value ratio, moreover, opportunities for U.S. export growth are slim with the exception of niche specialty stones. U.S. producers exported about 2 percent of production in the late 1990s. A bright spot on the horizon for the industry is the expected continued surge in historical restoration projects that require considerable amounts of stone to replace damaged pieces from the original construction.

Employment in the industry increased from 13,109 in 1997 to 15,903 in 2000. Over the same time period, payroll increased from $350 million to $475 million, and the number of productions workers grew from 10,284 to 12,917. In 2000, production workers earned an average hourly wage of $15.15.

Industry Leaders

Because of its logistical characteristics (transportation costs), the cut stone industry is highly fragmented into relatively small, local manufacturers. In 1997 slightly more than 1,000 establishments competed. The largest producer was Pluess-Staufer Industries Inc., of Proctor, Vermont, with sales of $130 million. Second was Alabama Limestone Company Limited, of Russellville, Alabama, with $60 million in sales.

Workforce

The employment outlook for the cut stone and stone products industry was dismal. In fact, most labor positions were expected to decline by about 20 percent by 2005, according to the U.S. Bureau of Labor Statistics. Jobs for helpers and material handlers, which account for 8 percent of the workforce, will likely diminish 22 percent by 2005; work for cutting machine operators, truck drivers, and finishers will fall 10 percent. Even management positions will decline 12 percent or more. Only opportunities for production managers are forecast to increase, though only slightly.

Research and Technology

New cutting, finishing, and construction technologies in the mid-1990s were helping the cut stone and stone products industry remain competitive against new synthetics and low-cost imports. For example, advanced construction techniques were used in Washington, D.C., in 1992 to create and erect massive 50-foot-tall limestone columns for the Market Square Arena—800,000 cubic feet of limestone were quarried to produce the 80,000 cubic feet of material actually contained in the columns. An advanced horizontal lathe rounded and fluted the huge structures, which were put into place as the concrete frame of the building was poured. The project was indicative of a trend toward greater use of natural stone in restorative building projects.

Cut stone producers were also benefiting from improved quarrying techniques, such as laser rock-face profiling and robotic drilling and cutting machines. While much of this technology was being developed for extraction of crushed stone and other minerals, cut stone producers were finding applications for these and related innovations.

Further Reading

Cook, Hugh. "The Keys To Historic Masonry Restoration." Building Design and Construction, February 1997.

"Construction Growth Tied to Population." Pit and Quarry, October 1996.

Gregerson, John. "Old Reliable." Building Design and Construction, March 1997.

Hernan, Patrick. "Southeast Report." Pit and Quarry, January 1997.

Paslawskyj, Michael. "The Outlook is High." Pit and Quarry, July 1996.

United States Census Bureau. Economic Census 1997. Washington, D.C.: GPO, 1999. Available from http://www.census.gov .

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .



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