Remodelers continue to see increase in businessNARI survey predicts more market stability in remainder of 2013
The National Association of the Remodeling Industry’s second-quarter Remodeling Business Pulse data of current and future remodeling business conditions continues to soar as quarter-over-quarter increases are seen in nearly all subcomponents measuring remodeling activity.
Deep into the remodeling season, remodelers are reporting the highest rating on overall business conditions at 6.31, up from 5.97 reported during the first quarter. This rating has steadily increased in the six quarters NARI has been tracking thus far.
“This summer, many companies entered the summer with a backlog of jobs, which is something most haven’t seen in the past few years,” 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. “What’s also positive is that the inquiries and bid requests are still steady, which provides some more market stability for remodelers.”
Growth indicators in the second quarter of 2013 include upward movement of 3.3 to 5.9 percent in current business conditions, number of inquiries, requests for bids, conversion of bids to jobs and value of jobs sold since last quarter.
This trend is expected to continue, as remodelers predict that three months out, their sales will be as strong as they are now. The No. 1 and 2 reasons for growth continue to be postponement of projects, up 5 percent at 87 percent, and improvement of home prices, up 6 percent to 65 percent, but economic growth has moved into the No. 3 reason for growth, at 49 percent, up 7 percent.
“As consumer confidence has increased, so has the confidence of the remodeling community,” O’Grady says. “It appears that everyone has finally settled into this ‘new normal’ economic picture, and more bids are turning into remodeling projects, and at higher price points.”
Remodelers, although optimistic, remain cautious about the future, with the outlook for three months from now going down 1.3 percent from last quarter.
Other significant contributors to overall activity are certainty about the future, low interest rates and growth in stock market.
“One of the things we saw from the comments of the second-quarter RBP is that many homes were impacted by disasters in the past three months - from the storms along the East Coast, tornadoes in Oklahoma and the explosion in Texas,” O’Grady says. “Remodelers in those areas are involved in the cleanup, and that’s impacting their businesses.”