Professional remodelers posted higher year-end numbers in the final quarter of 2003 than in any fourth quarter of the past two years, and most industry professionals expect business to stay strong in 2004, according to the results of the National Association of Home Builders’ Remodeling Market Index.
In a year-to-year comparison–the most accurate indicator as the RMI is not seasonally adjusted–both indexes showed improvement over the fourth quarter in 2002. The index gauging current market conditions rose to 50.3, a 7-point gain over 2002’s 43.2. The index measuring future expectations moved to 48.3, a 9-point gain over last year’s 39.1. Every region posted an increase of at least 6 points over 2002’s fourth quarter, with the most significant change in the West, where the index jumped by 13 points to end at 56.4.
“We anticipate that when the final numbers are tallied, the 2003 remodeling market will close at $182 billion, surpassing last year’s $173 billion by about 5 percent,” said NAHB Remodelors Council Chairman Doug Sutton. “It has been a banner year for the remodeling industry as a whole, and we feel very good about our businesses as we move into the new year.”
The latest RMI is based on a quarterly survey of 565 professional remodelers, whose answers to a series of questions were assigned numerical values to calculate two separate indexes. The first index gauges current market conditions and is based on remodelers’ reports of major and minor additions and alterations, plus maintenance work and repairs, on both owner- and renter-occupied dwellings. The second index gauges expectations for the near future and is based on remodelers’ reports of their calls for bids, amount of work committed for the next three months, job backlogs and appointments for proposals. A variety of “special questions” are also asked at the end of the survey to help pinpoint market trends.
“The year-over-year gains in both indexes hold true for every region across the board, indicating the continued strength of the market,” said NAHB Chief Economist David Seiders. “What’s more, substantial year-over-year gains are apparent for every single component of the future expectations index – including calls for bids and amount of work committed for the next three months for both owner- and renter-occupied dwellings, plus overall job backlogs and appointments for proposals.”
Additional increases were evident in the both minor and major additions and alterations with respective gains of seven and 12 points over 2002’s fourth quarter. Maintenance and repairs saw a minor growth of two points when compared to 2002.
Meanwhile, results of the “special questions” section of the RMI offer valuable insight into today’s remodeling consumer, including the public’s view of the remodeling industry, customer expectations and involvement and common reasons why people remodel.
Seventy percent of respondents felt the public’s image of industry has improved, and 57 percent noted that customers are better informed on remodeling projects, up from 47 percent in a 2000 industry poll.