Remodeling Market Index registers decline to 41.7
The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) reported a drop to 41.7 in the third quarter from 43.9 in the second quarter, after posting a four-year high of 46.5 in the first quarter. An RMI below 50 indicates that more remodelers report that market activity is declining than report that it is increasing.
"Remodelers report that while many consumers show interest in having remodeling work done, they are slow to commit to projects,” said NAHB Remodelers chairman Bob Peterso, a remodeler from Ft. Collins, Colo. “Consumers are in a ‘wait and see’ mode with regard to current economic conditions."
The RMI component measuring current market conditions fell to 43.0 from 44.8 in the previous quarter. The RMI component measuring future indicators of remodeling business declined to 40.4 from 43.0 in the last quarter.
All three components measuring current market conditions decreased: major additions to 45.2 (from 46.2 in the second quarter), minor additions to 45.7 (from 48.5) and maintenance and repair to 37.1 (from 38.4). Future market indicators decreased: calls for bids to 45.4 (from 49.8), amount of work committed for the next three months to 29.9 (from 32.3), backlog of remodeling jobs to 43.0 (from 45.7) and appointments for appraisals to 43.3 (from 44.2).
Regionally, current remodeling market conditions shrank in the Northeast to 43.9 (from 48.1 in the second quarter) and the West to 40.9 (from 48.2). Increases were noted in the Midwest at 46.8 (from 44.4) and the South at 47.1 (from 42.9). Future market indicators fell in all regions, except for the South, where it increased to 42.2 from 41.6 in the second quarter.
“The current economic instability continues to affect consumer confidence, therefore we have seen a drop off in remodeling activity for the last two quarters,” said NAHB chief economist David Crowe. “In order for the remodeling market to pick up, homeowners need to have access to less restrictive lending requirements and see their economic future stabilizing.”
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Clearwater Paper announces sawmill sale to Idaho Forest Group
Clearwater Paper Corp. has entered into an agreement to sell its Lewiston, Idaho, sawmill to Idaho Forest Group of Coeur d’Alene, Idaho.
The transaction includes the sale of Clearwater Paper’s sawmill, planer mill, dry kilns and related assets, along with log and finished goods inventories and timber under contract, in the aggregate amount of about $30 million.
The companies have entered into a long-term residual fiber supply agreement with the goal of delivering consistent supplies of chips and sawdust to Clearwater Paper’s Lewiston pulp mill from Idaho Forest Group Mills.
"This has been a very careful and thoughtful decision for everyone at the company," said Tom Colgrove, president of pulp and paperboard at Clearwater Paper. "We believe that this is the best possible outcome for the mill and its continued operation in the region, our company and our shareholders.
"We believe the tough times in the lumber industry will continue into the fore-seeable future, and that the mill will be operated by a company whose core focus is lumber," he added. "We believe IFG has the people, resources and the business structure to make the Lewiston sawmill very successful."
About 250 affected Clearwater Paper employees will receive severance and all provisions subject to the WARN Act, which includes up to 60 days’ worth of pay and benefits.
Idaho Forest Group will officially take possession in the fourth quarter of 2011.
Pending home sales decline in September
The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 4.6% to 84.5 in September from 88.6 in August but is 6.4% higher than September 2010 when it stood at 79.4, according to the National Association of Realtors. The data reflects contracts but not closings.
“A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly 2 million net new jobs in the past 12 months,” said Lawrence Yun, NAR chief economist.
The PHSI in the Northeast declined 4.7% to 60.6 in September but is 4% above a year ago. In the Midwest, the index dropped 6.2% to 71.5 in September but is 12.3% higher than September 2010. Pending home sales in the South fell 5.5% in September to 91.6 but are 5% above a year ago. In the West, the index declined 2.1% to 105.8 in September but is 5.6% higher than September 2010.
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