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DES PLAINES, IL -- The National Association of the Remodeling Industry's (NARI) released its fourth-quarter Remodeling Business Pulse (RBP) data of current and future remodeling business conditions that continue to point to growth. Currently 67 percent of remodelers nationwide are seeing growth compared to only 15 percent who are reporting declines.
The current conditions rating showed a slight directional decline at 6.31, down from 6.41 in September. (Ratings above 5 indicate growth). This easing comes after two quarters of growth. While the ratings of current conditions all remain positive, marginal decreases in three of the four sub-components reflect lower growth rates. The exception was for 'sales value of jobs sold' which had a small increase.
"There has been long term improvement in sales value, which indicates that larger projects are making a comeback," says Tom O'Grady, CR, CKBR, chairman of NARI's Strategic Planning & Research Committee and president of O'Grady Builders, based in Drexel Hill, Pa. "Consumers are feeling that the economy will be good for the foreseeable future."
While postponed projects remain the top reason at 70% for growth, moving into the number two position is consumer's feelings of more certainty about the future. This driver spiked to 63% in the current survey, up from 43% recorded in September. Economic growth was seen as a driver by 62%, up five percent from last quarter, while improving home prices remained unchanged at 50%.
While all ratings of current conditions remain positive, most of the sub-components were softer than September: (Rating is from 1 to 9, where 1 is much worse than a year ago and 9 is much better; 5 is about the same as last year):
Number of inquiries was 6.11, down from 6.51. Requests for bids fell to 6.04, down from 6.41. Conversion of bids was 5.84, down from 6.01. Sales value of jobs was almost constant at 6.30, just above the 6.27 in September.
"This is indicative of the slow, steady recovery of the remodeling industry," says Tom O'Grady, CR, CKBR, chairman of NARI's Strategic Planning Committee. "The majority of remodelers are seeing growth, and are confident that the market is improving which is in line with market indicators."
Unlike the current business rating, the outlook for business three months from now had a statistically significant increase in December at 6.32 vs. September's 6.07, reversing the downward trend of the past two quarters. Increased business is expected by 73% of remodelers while only 10 percent are anticipating declines.
Comparing business conditions across different regions of the county, it is interesting to note that the West has the strongest ratings for all of the sub-measures of current conditions. The Northeast is lower on all measures except 'Conversion to bids to jobs' where it dips significantly lower versus all but the Midwest. The outlook for the future is directionally strongest in the South.
The survey also provided detailed findings regarding energy efficiency upgrades. A dominant proportion of remodelers--80 percent--discussed energy efficiency with homeowners. Cost, savings, and payback period are the dominant issues on homeowner's minds. Interestingly, 94 percent of remodelers are involved in one or more energy savings upgrades, with added insulation, high R windows and high efficiency furnaces being the most popular. Consumers are interested in finding ways to save energy usage as well as remodelers. "Unless the client brings this up early in the conversation," says one remodeler, "we initiate the thought because it's important to us and future generations."
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NARI Says Current Conditions Reflect Lower Growth Rates in Remodeling Industry
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