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CGP is bullish on home improvement

BY HBSDEALER Staff

A forecast from Customer Growth Partners, a New Canaan, Conn.-based research and consulting firm, is predicting home-related retailers will show the strongest growth in 2011.

CGP President Craig Johnson also predicted Home Depot and Lowe’s will have their best fourth quarter performances since 2006 when they release their earnings Feb. 22 and Feb. 23, respectively.

As a whole, retail will grow 5.1% in 2011, a pace that would be the strongest in five years. "Although retail is the Rodney Dangerfield of industries — getting little respect compared to the tech and other sectors — in fact, retail is by far the nation’s largest employer, with over 18% of total payrolls, more than tech, media and health combined," said CGP President Craig Johnson.

The reason for Johnson’s optimism? Four years of pent-up demand and depressed sales levels during the housing slump, according to CGP. Plus, very strong growth in holiday growth showed people are spending again.

Johnson added that no industry suffered more job losses during the recession that retail, which lost 1.2 million jobs over the past three years. Although Retail sector employment will still lag 2007’s peak levels, the sector will add some 600,000 jobs, about half the number lost during the recession.

 

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A little late night shopping

BY HBSDEALER Staff

A Home Depot store in Concord, N.H., reopened late on Jan. 24 after a pick-up truck drove through the wall of a local residence and landed in the living room. According to the story in the Union Leader, the driver of the pick-up lost control of the vehicle on a 90-degree curve in the road and plowed completely through the living room wall. The occupants of the home — a man and his 7-year-old twin daughters — escaped injury. But they needed to repair the damage enough to get through the night.

“We needed to get thing buttoned up so the house wouldn’t freeze,” said homeowner Bill Tanguay. “We went out to see if we could get our hands on insulation and a thermostat to keep heat running. Home Depot already closed, but they opened up, let us in and helped us out. The manager there made sure we had everything we needed."

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Market Recap: RISI Crow’s Construction Materials Cost Index

BY HBSDEALER Staff

 

A price index of lumber and panels used in actual construction for Jan. 28, 2011 

*Western – regional species perimeter foundation; Southern – regional species slab construction. 

Crow’s Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.

LUMBER: On the North American front, SPF lumber sales were slow. Producers in the East struggled to keep prices at prior levels. In the West, producers felt little pressure to discount #2&Btr, but quotes were lowered in line with market levels. Sales activity in the Southern Pine lumber market was sluggish. Dimension price increases in the Central and East zones eased and discounts were more apparent, while prices on the Westside deteriorated $10 to $20. Demand for Coastal species lumber trickled into mills for much of the week, with a slight uptick reported at midweek. Any increase in buyer participation was not enough to keep several prices from dropping $10 to $15.Inclement weather now hampers retail takeaway, creating a market demand that is "kinda quiet," according to one Inland species lumber manager. The drag on demand has not created much mill-level reaction, however, and prices hold within recently reported ranges. Ponderosa Pine Mldg&Btr continues to hold. Tightest of the Ponderosa items is #2&Btr Shop. Prices have not changed on #3 or P99. Reports indicate that 4/4 Shop is tight. Activity for #3 Common is picking up, with both domestic and offshore destinations voicing interest. However, #2 Common is clearly more active than #3, and all established price ranges continue unchanged. Idaho White Pine reports show little change in the overall demand for the product and no change in price levels. Prices of Eastern White Pine boards are stable, and good tallies can bring a little premium. Most Radiata Pine producers in both New Zealand and Chile have increased their participation in markets other than the United States. Western Red Cedar mills were willing to negotiate price when it fit, but the weather’s hold on buying had more to do with market activity than price.

PANELS: Weakness in the Western Fir plywood market remained in place, increasing pressure on producers to make key decisions revolving around plywood pricing and production costs. Southern Pine plywood producers waited out another week without lowering prices for the most part, despite light sales activity. The OSB price picture is a little confused, but most areas reflect at least a $10-drop from last week’s numbers. Although Canadian plywood mill files are still past the end of January, and although most mills remain unchanged in their approach to prices, the market is clearly softer and more competitive. Particleboard and MDF prices in the South have generally taken on a feeling of consensus among producers, with "about five dollars," being added to most items. 

Source: RISI’s Crow’s Weekly Market Report

For more on RISI, click here.

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