LUMBERYARDS

D.C. Hotline: Repeal of the paperwork act

BY HBSDEALER Staff

Finally, the fight against the 1099 form expansion built into the nation’s healthcare reform package — and ridiculed as “The Paperwork Salvation Act of 2010” — has reached a satisfying conclusion. It was repealed last month.


“After a hard-fought, year-long battle on the 1099 legislation, today’s vote is a huge victory for all LBM dealers across the country,” said Scott Lynch, National Lumber & Building Material Dealers Association (NLBMDA) executive VP. “Thanks to all of the hard work from all of the NLBMDA members for really pressing this issue with their respective representatives and senators, and to those who traveled to Washington for the NLBMDA Legislative Conference to make the case in person. This is a huge relief for businesses of all sizes.”


President Obama signed the repeal legislation in mid-April, about a month after the NLBMDA’s Legislative Conference took place in Washington, and dealers canvassed the capital armed with talking points aimed at grounding the onerous 1099 mandate.


Before it was repealed, the rule would have required small businesses to file an IRS Form 1099 on all purchases of $600 or more.


Visit dealer.org for more on the 1099 issue and other legislative updates.

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HIRI Conference tunes into “That ‘90s Show”

BY Ken Clark

Arlington, Va. — At last year’s Home Improvement Research Institute (HIRI) Spring Conference, the assembled researchers, guests and partners — all thirsty for good news — were told by Morgan Stanley analyst Ian Sugarman that the modest, pre-bubble year of 1999 is the “new normal.”


Fast-forward to this year’s event, held here at the Doubletree Crystal City, and a very similar group of attendees were told to brace for even more simulated time travel — this time to 1996.


“The theme is, we’re going back to the mid-1990s, 1996, in terms of consumer activity, housing market and mortgage lending,” said Michael Fratantoni, VP research and economics for the Mortgage Banking Association and the leadoff speaker of HIRI’s daylong series of presentations.


Things could be worse than 1996. Single-family starts — that’s just single-family— finished the year at 1.160 million, up slightly from 1.076 million in 1995. To be clear, today’s absolute numbers have no resemblance to the mid-’90s, but the growth rate should look familiar.


The MBA is forecasting a 1.7% housing start increase in 2011 to 595,000 — and a more significant leap to 850,000 starts in 2012. 


Also reminiscent of the ’90s, home-ownership was hovering in the 65%-range, which will become more familiar in 2011 as we see a shift from owner-occupied housing to renter-occupied housing, Fratantoni said.


The series of seminars carried the theme “Understanding Today’s Home Improvement Industry” and kicked off with a detailed examination of some unpleasant and lingering macroeconomic trends. Other charts presented by the day’s seven presenters picked up where last year’s conference left off, by establishing a “the worst-is-behind-us” view of the home improvement industry.


“I think the main message we heard is the market is improving,” said Fred Miller, managing director of HIRI, a nonprofit organization whose members share the cost of industry research. “And it’s often the smaller projects or the spontaneous emergency projects that are helping to boost home improvement spending.”


Another theme of the diverse collection of presentations is that the national picture is obscured by regional variations. Color-coded maps revealed the hot and cold spots, with the sand states of California, Nevada and Florida generally lagging.


“Texas probably survived the economic downturn better than any other state,” said Jim Gillula, of IHS Global Insights. 


To those who point to pent-up demand as a reason to launch optimistic housing starts forecasts, Fratantoni has another term to consider: “pent-up supply.” He defines this term vaguely as the number of houses that aren’t on the market currently, but will be when the homes’ owners see signs of buying activity and home price stabilization. 


“There is pent-up demand, but there is also a lot of pent-up supply out there,” Fratantoni said. 


Another balancing factor that gets little play is the number of demolitions. “There are about 300,000 demolitions per year,” he said, showing that housing is barely breaking even with household formations. 


And what would a research conference be without mention of the researchers’ tool du jour, social media? Jim Longo, VP client development and marketing for iTracks, asked that question, and then addressed it. He described social media as a tool that’s here to stay and an effective method of identifying influencers. He added: “It’s important to understand how your brand is being viewed on Facebook and Twitter.” 


The daylong HIRI event attracted about 70 research professionals — members as well as non-members — from a wide variety of home improvement companies. HIRI is a nonprofit organization that pools resources to provide quality industry research for members.

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Simpson sales increase 7% in first quarter

BY HBSDEALER Staff

Pleasanton, Calif.-based Simpson Manufacturing’s first-quarter net sales increased 7.0% to $132.5 million compared with the same quarter last year.

Net income declined 23.1% to $7.08 million, down from $9.20 million in the same three-month period of 2010.

The company said sales to contractor distributors, dealer distributors, lumber dealers and home centers increased in the quarter, despite economic conditions it described as "challenging." Sales of anchor products and shearwalls also increased over the same period.

In the first quarter of 2011, sales increased throughout most of North America and increased significantly in Europe, the company said. Sales increased in the United States with increases in California, the Midwestern, Southeastern and Northeastern regions as compared with the first quarter of 2010, partly offset by decreases in the Western region excluding California.

The company’s subsidiary Simpson Strong-Tie makes connectors and fastening systems, pre-fabricated shearwalls and related products.

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