NARI Reports Outlook for Business in First Three Months of 2015 Improves
January 19, 2015
The National Association of the Remodeling Industry’s (NARI) released its fourth-quarter Remodeling Business Pulse (RBP) data of current and future remodeling business conditions that continue to point to growth. Currently 67 percent of remodelers nationwide are seeing growth compared to only 15 percent who are reporting declines.
The current conditions rating showed a slight directional decline at 6.31, down from 6.41 in September. (Ratings above 5 indicate growth). This easing comes after two quarters of growth. While the ratings of current conditions remain positive, marginal decreases in three of the four sub-components reflect lower growth rates.
“There has been long-term improvement in sales value, which indicates that larger projects are making a comeback,” said Tom O’Grady, CR, CKBR, chairman of NARI’s Strategic Planning & Research Committee and president of O’Grady Builders, based in Drexel Hill, Pa. “Consumers are feeling that the economy will be good for the foreseeable future.”
While postponed projects remain the top reason at 70 percent for growth, moving into the number two position is consumer’s feelings of more certainty about the future. Economic growth was seen as a driver as well, while improving home prices remained unchanged at 50 percent.
While all ratings of current conditions remain positive, most of the sub-components were softer than September. “This is indicative of the slow, steady recovery of the remodeling industry,” said Tom O’Grady. “The majority of remodelers are seeing growth and are confident that the market is improving, which is in line with market indicators.”
Comparing business conditions across different regions of the county, it is noted that the West has the strongest ratings for all of the sub-measures of current conditions. The Northeast is lower on all measures except ‘conversion to bids to jobs,’ where it dips significantly lower versus all but the Midwest. The outlook for the future is directionally strongest in the South.
The survey also provided detailed findings regarding energy-efficiency upgrades. A dominant proportion of remodelers – 80 percent – discussed energy efficiency with homeowners. Cost, savings and payback period are the dominant issues on homeowners’ minds. Interestingly, 94 percent of remodelers are involved in one or more energy-savings upgrades, with added insulation, high R windows and high-efficiency furnaces being the most popular.