Report Sees 4% Increase for Home Improvement Market in 2013
The September 2012 IHS Global Insight/HIRI Home Improvement Products Market Forecast projects total home improvement product sales for 2012 will reach $274 billion, a 4.9 percent increase over 2011. The report sees the market improving another 4 percent in 2013.
As employment growth accelerates and housing markets improve in 2014, stronger growth of home improvement sales averaging 5.9 percent in 2014 and 2015 is projected. Analysts then see a slight deceleration in the following two years as the housing market cycle runs its course.
Most recent economic reports point to continued growth, albeit at a modest pace, according to Home Improvement Research Institute officials. It foresees 2.1 percent growth of real GDP this year, with the outlook for next year weakening further, however. Uncertainty over a permanent resolution of federal spending and tax imbalances and an expected deepening of recession in the Eurozone will hinder improvements in both business and consumer confidence, the report suggests
Some of the most upbeat news is coming from housing, with prices now beginning to turn up, and home sales and housing starts trending higher. Existing home sales are expected to increase 6.2 percent this year and 8.1 percent in 2013. Housing starts are trending higher than expected, but the analysts do not expect a sharp acceleration next year from the 24 percent increase projected this year.
Home Improvement Products Market
The HIRI/IHS Global Insight forecast for home improvement product sales growth in 2012 is little changed from its earlier March report. Consumer market sales are expected to increase by 5.3 percent and professional market sales by 3.9 percent. "We continue to anticipate slower growth of the home improvement products market in 2013," officials state. "Our forecast shows a 4.0 percent increase to $284.8 billion–revised downward slightly compared to our March report. Professional market sales growth will slightly outpace consumer Market growth, since the former will benefit more from steadily improving housing market activity.
As employment growth accelerates and housing markets improve in 2014, we will see stronger growth of home improvement product sales. We expect growth averaging 5.9 percent in 2014-2015 with a slight deceleration in the following two years as the housing market cycle runs its course.
Revised data from the Census Bureau on retail sales show slower growth of the sales of Building Material Dealers in 2010 and 2011. With our market size estimates revised to incorporate these data, total home improvement product sales now show no growth in 2010 and a 3.1 percent increase in 2011 (down from growth rates of 2.3 percent and 3.8 percent previously estimated for these two years).
Total Home Improvement Market Forecast
|Billion Dollars ||273.9||284.8||301.7||319.4||332.3||343.9|
Source: September 2012 IHS Global Insight/HIRI Home Improvement Products