HIRI Expects Home Improvement Gains in 2009

Tampa, FL, Oct. 21, 2008--The home improvement market hadn’t seen a decline since 1991, according to the Home Improvement Research Institute.

However, now HIRI/Global Insight says 2008 will show a decline of 3.1 percent after a 0.7 percent decline last year.

The estimate for 2008 sales was lowered by $5.3 billion from the previous forecast (February 2008) to $296.8 billion.

The updated 2007 forecast for the market came in at $306.2 billion, a downward revision of just $0.5 billion.

The continued downturn in the housing market coupled with slowing consumer spending is at the heart of the declines, the group said.

However, it noted that the long-term outlook for this market still remains strong and is estimated to average growth of 5.9 percent annually over the next 5 years, reaching $396 billion in 2013.

HIRI expects real consumer spending to decline in the fourth quarter of this year and the first quarter of 2009, leading to a corresponding two-quarter decline in real GDP.
   
HIRI also said the housing market has not yet hit bottom and it expects housing starts to fall about 30 percent this year and to bottom out in the fourth quarter.

HIRI expects a 3.1 percent decline in total home improvement product sales in 2008 and only a small gain of 1.6 percent in 2009.
 
Hiri said 2010 and 2011 will see a cyclical rebound in home improvement product sales, with growth exceeding 8 percent in nominal dollars each year.