U.S. homeowners, feeling positive about their financial future, are spending more on remodeling projects, according to a report by the National Association of the Remodeling Industry (NARI). The trade group’s fourth-quarter Remodeling Business Pulse, which measures current and future remodeling business conditions, has experienced significant growth across all indicators, with forecasting in the next three months hitting its all-time highest level.
The forecast data come from surveys with NARI members, who work as full-time remodelers.
“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; therefore, they are spending more freely on remodeling needs,” said Tom O’Grady, chairman of NARI’s strategic planning & research committee and president of O’Grady Builders, based in Drexel Hill, Pa.
Growth indicators in the last quarter of 2012 are as follows:
- Current business conditions are up 2.1% since last quarter;
- Number of inquiries is up 3.9% since last quarter;
- Requests for bids are up 3.7% since last quarter;
- Conversion of bids to jobs is up 3.5% since last quarter; and
- Value of jobs sold is up 4.3% since last quarter.
Throughout 2012, the Remodeling Business Pulse produced less statistically significant increases and decreases; however, the fourth-quarter data show movement in highly important business areas, such as conversion rates and value of jobs.
Although they provide positive marks, NARI members indicated that many consumers are spending on remodeling out of necessity.
As one NARI member put it: “Homeowners are still concerned about spending money but will do so because they cannot postpone any longer. They are spending more conservatively than they did prior to the crash.”
Still, according to the data, expectations for 2013 are even brighter. Two-thirds of remodelers forecasted the next three months positively, and the rating jumped 13.1% from last quarter.
Drivers of this positive outlook continue to be postponement of projects (81%) and the improvement of home prices (51%).
Of the small segment predicting declines, 91% cited uncertainty of the future with commentary focused largely on 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 said. “NARI members are looking forward to having a well-deserved, productive year ahead.”