Remodeling Market Continues to Show GrowthOctober 30th, 2013 by DWM Magazine
The National Association of the Remodeling Industry’s (NARI) third-quarter Remodeling Business Pulse (RBP) data of current and future remodeling business conditions continues to improve. Quarter-over-quarter increases are seen in nearly all sub-components measuring remodeling activity.
Entering into the holiday season, which has been a slower season in recent years, remodelers are reporting the highest overall rating on business conditions at 6.41, up from 6.31 reported during the second quarter. This rating has steadily increased in the six quarters NARI has been tracking.
“From the comments on the Remodeling Business Pulse survey, pent-up demand continues to drive the current remodeling market,” says Tom O’Grady, CR, CKBR, chairman of NARI’s strategic planning and research committee and president of O’Grady Builders, based in Drexel Hill, Pa. “The general sense is that consumers are tired of waiting and feel more secure about spending money, which is also reflected in the higher values in jobs sold.”
Growth indicators in the third quarter of 2013 are as follows (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):
- Current business conditions was rated 6.41 (from 6.31 last quarter)
- Number of inquiries up was rated 6.55 (from 6.50 from last quarter)
- Requests for bids remained the same as last quarter, at 6.45
- Conversion of bids to jobs was rated 6.00 (from 5.91 last quarter)
- Value of jobs sold was rated 6.31 (from 6.12 from last quarter)
One interesting note in this second year of the survey is that going into the fourth quarter of the year, remodelers tend to be more cautious in their outlook—that rating fell 3.2 percent from last quarter, though at 6.12, it’s still higher than the 2012 low of 5.34.
“As we enter the holiday season, inquiries about projects don’t slow, but the conversion rate inquiries to sales tends to, which has been reflected in the last two third-quarter Remodeling Business Pulse surveys,” says O’Grady. “It’s hard to judge for sure, after consumers spend money during the holidays, how serious they will be in the new year to get that remodeling project under way.”
Other significant contributors to overall activity:
- Postponed projects continue to be the key factor in remodeling business growth, at 85 percent
- Improving home prices came in at the secondary, at 72 percent of respondents (up from 65 percent last quarter)
- Certainty about the future moved into the No. 3 spot, at 48 percent (edging out economic growth, which came in at No. 3 in the second quarter)
“Weather continues to impact sales regionally,” O’Grady says. “But another reason that stood out was that successful remodelers spent time refining their processes and skills”