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U.S. Remodelers Bullish on 2013

Thursday, January 10, 2013

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Returning homeowner confidence has the nation's remodelers starting 2013 on a high note and forecasting record levels of activity for the first quarter.

From consumer inquiries to jobs sold, growth indicators in the last quarter of 2012 rose significantly across the board, "with forecasting in the next three months hitting its all-time highest level," according to the National Association of the Remodeling Industry’s (NARI) fourth-quarter Remodeling Business Pulse data.

Credit an increase in homeowner security and the end of a tense campaign season, NARI reports.

Homeowners
CNN / Thinkstock

U.S. homeowners are starting to catch up on deferred maintenance and remodeling projects, the National Association of the Remodeling Industry reports.

“Remodelers are indicating major growth in the future, with many saying that clients are feeling more stable in their financial future and their employment situations," 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.

"Therefore, they are spending more freely on remodeling needs."

The survey was conducted over 11 days in December among members of NARI's Research Panel. The association has 7,000 member companies, who represent about 63,000 contractors.

By the Numbers

In the last quarter of 2012, remodeling contractors reported these changes since the prior quarter:

  • Current business conditions up 2.1 percent;
  • Number of inquiries up 3.9 percent;
  • Requests for bids up 3.7 percent;
  • Conversion of bids to jobs up 3.5 percent; and
  • Value of jobs sold up 4.3 percent.

The welcome improvement capped a year of ups and downs, NARI reported.

"Throughout 2012, the Remodeling Business Pulse produced less statistically significant increases and decreases," the group said. "However, the fourth-quarter data shows movement in highly important business areas such as conversion rates and value of jobs."

Reality Check

Despite the improvement, NARI members say homeowners are putting their remodeling dollars toward necessities and long-deferred projects, not luxuries.

Home remodeling
Ateda Design

Two-thirds of remodelers forecast booming business, but say  homeowners will continue to spend carefully.

"Homeowners are still concerned about spending money, but will do so because they cannot postpone any longer," said one member. "They are spending more conservatively than they did prior to the crash.”

Still, expectations for 2013 are bright. Two-thirds of remodelers offered a positive forecast for the next three months, driven by widespread postponement of projects and improving home prices.

Concerns Continue

The survey also reflected some continuing concerns. Fourteen percent of respondents forecast a short-term decline in remodeling activity, due mainly to high levels of uncertainty about the future.

Reflecting the then-looming "fiscal cliff" crisis, most respondents who reported concerns cited the possibility of tax increases and "leadership issues in Washington."

"Now that the election is over, consumer confidence is starting to grow and so has remodelers’ confidence," O’Grady says. "NARI members are looking forward to having a well-deserved, productive year ahead."

Remodelers Aid Sandy Victims

NARI's members took advantage of the holiday lull by pitching in to help rebuild East Coast communities devastated by Hurricane Sandy.

Breezy Point fire
ABC News

Among the NARI groups aiding Sandy's victims was the Eastern Massachusetts chapter, which organized a drop-off of construction equipment, clothing, food and water in Breezy Point, NY, where scores of homes were destroyed by fire.

Collecting clothing, cooking food, rounding up equipment, working without payment assurance and, in some cases, rebuilding entire homes, NARI members in New York, New Jersey, Pennsylvania, Massachusetts and elsewhere donated time, supplies and expertise in numerous communities to help the rebuilding effort .

“Those affected by the storm are now trying to piece lives back together,” said NARI National Chairman Michael Hydeck, MCR, CKBR, president of Hydeck Design Build Inc., in Telford, PA.

 “The NARI community is proud to come together and support each other in what will be a long and difficult rebuilding process,” Hydeck says.

   

Tagged categories: Maintenance programs; Market forecasts; National Assoc. of the Remodeling Industry (NARI); Renovation; Residential contractors

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