by Fred Miller
The September 2016 Remodeling Business Pulse (RBP) survey showed a continuation of growth in the industry, but at a slower pace. The overall current business rating of 5.81 was in the growth area (above 5 indicates growth), but was directionally down from that measured in the June survey.
Only 20% of remodelers see declines currently versus 54% seeing growth. The sub-components of current conditions all showed directional declines in September. The strongest of the changes was for ‘Number of inquiries’ which fell 3.5%. ‘Value of jobs sold’ was next in strength of decline at 2.8%. ‘Conversion from bids to jobs’ remained the weakest measure but fell by the smallest percentage at -0.7%. The outlook for business three months from now was at 5.62, a directional decline from last year’s 5.79. A majority (51%) of remodelers are expecting growth, while a smaller group (19%) expects some level of decline. The balance (30%), see sales being about where they were last year. While still positive, those seeing growth are 2.7 times those seeing declines in this wave while the same ratio was stronger at 3.5 times last year.
Remodelers were asked about what is driving growth.
‘Postponed projects’ (63%) remained the top driver and it was up slightly from last quarter.
Remaining the number two driver, ‘home prices improving’ was 59%, somewhat higher than June. ‘Economic growth’ moved up to the number three driver at 41% a very small growth over the prior quarter. ‘Low interest rates’ made it into the top 4 for the first time at 38%, up meaningfully from June’s level of 33%. Many comments were made regarding the potential impact of this year’s presidential election. The uncertainty of the outcome has many remodelers nervous. A NARI Member in Massachusetts capture the overall sentiment well by saying, “Optimistic, as long as we see stability after the election.”
This study is conducted by Consumer Specialists for the National Association of the Remodeling Industry (NARI). The survey was done online with 138 NARI members who volunteered to be part of an ongoing research panel. Conducted from September 12-21, 2016, the study incorporates a series of questions on current and future business conditions. Respondents provide input on both current and future conditions compared to the previous year and the strength of that change. Current business ratings are compared with the prior quarterly study. ‘Outlook for 3 months out,’ is compared to the results from the same time the prior year to compensate for strong seasonal effects.
The next wave of this study is scheduled for December 2016 with results published in January 2017.
About the Author
Consumer Specialists is a research and marketing consulting firm with a focus on the building products industry. Questions can be directed to Fred Miller of Consumer Specialists at 901.757.5865 or Fred@consumerspecialists.com