AHMA Index sends mixed signals in November
The American Hardware Manufacturers Association’s AHMA Home Improvement Industry Confidence Index’s Current Situation Index declined in November to 208.3 from 216.7 in October (October 2008 = 100), while the Future Expectations Index increased to 256.9 from 208.6 in October.
“With 80% of our members predicting higher sales looking ahead one year, and 50 percent reporting current sales higher than year-ago levels, there is reason for guarded optimism within our industry,” said Timothy Farrell, president and CEO of the AHMA. “However, with unemployment at 9.8%, logic would dictate that any full recovery for the economy as a whole, and the home improvement industry in particular, remains a very tenuous prospect.”
In comparing current sales levels with year-ago levels, 55% of respondents said sales were higher in November versus year-ago levels, up from 52% in October, while 28% reported sales were even, and 22% said sales were below year-ago levels.
Looking forward six months, 69% of respondents said they expect sales to be above current levels, up from 52% in October, while 28% of respondents said they expect sales to be even in six months, and 6% expect sales to be below current levels.
Looking forward one year, 80% of respondents project sales will be higher, up from 69% in October, while 20% project sales will be even one year from now, and those who project sales will be below current levels were zero.
The November Confidence Index survey asked two supplemental questions of AHMA members. Of the first, regarding the proposed two year moratorium on earmark spending in congress, 90% responded “Yes;” 8% responded “Not Sure;” and 2% responded “No.”
To the second question, regarding the push to pass the Strategic Arms Reduction Treaty, known as START, which would reduce the U.S. and Russian nuclear arsenal by approximately a third each, 40% responded “Approve;” 22% responded “Not Sure;” and 38% responded “Disapprove.”
Researchers see demand opening for windows and doors
After falling 4% annually since 2004, demand for windows and doors is forecast to rise 6.6% per year to $31.2 billion in 2014, according to a study from The Freedonia Group.
Although housing completions will remain below the level reached at their cyclical peak in 2006, the recovery in new home construction will fuel above-average gains in the residential market for windows and doors through 2014,” according to a Cleveland-based Freedonia Group statement promoting its “Windows & Doors” study.
Plastic windows and doors — including vinyl, fiberglass or wood-plastic composites — will see the most rapid growth, increasing more than 10% per year, according to Freedonia. One reason is that improvements in processing techniques have enabled manufacturers to make less-costly, more-efficient fiberglass doors that look more and more like real wood.
Meanwhile, demand for wood windows and doors is forecast to rise 7.2% per year to $10.9 billion in 2014.
Here is the breakdown by category of annual growth through 2014:
Metal, 4.3% Wood, 7.2% Plastic, 10.2% Total, 6.6%
Lowe’s executives unveil digital moves
Sales at Lowes.com are running about 35% ahead of last year, according to CEO Robert Niblock, who spoke to analysts during the retailer’s recent Analyst and Investors Conference. Still, the Mooresville, N.C.-based home improvement giant has ideas on how to improve its digital business.
Among the projects to advance that goal are a mobile app to help customers buy product from their mobile devices. Lowe’s executives said the company is adding at least 1,200 additional SKUs to the site each week. (It has more than 110,000 SKUs online currently.)
The lowes.com website is important to the retailer not only as an outright revenue generator, but also as a sales driver. “A large portion of our total sales are influenced online,” said Larry Stone, Lowe’s president and COO.
In early 2011, the company will launch “ask and answer” functionality for all product categories on lowes.com. With this feature, according to Stone, customers asking product specific questions will “receive answers from a variety of sources — the lowes.com community, Lowe’s employees and manufacturers.”
The company has also enhanced its lowes.com in-store pickup guarantee — instead of 30 minutes, orders will be ready in 20 minutes. To promote the change, the company’s web site promotes the slogan: “Shop. Click. Pick up. 20 minutes guaranteed.”
The moves reflect an increasingly multi-channel world.
“We cannot operate as independent sales channels because customers are not shopping that way,” said Stone. “They’re shopping at Lowe’s, wheter that includes a single store, multiple stores, lowes.com, over the phone or an in-home selling expericence.”