Hurricane Rebuilding Pushes 2004 Home Improvements
Tampa, Florida, March 1--The active hurricane season helped drive spending on home improvement products to a new record high estimate of $271.4 billion in 2004, according to the Home Improvement Research Institute (HIRI).
The rate of spending represents a 13 percent increase over the $240.6 billion total in 2003. In June 2004, before the hurricane season, HIRI had predicted a 10 percent increase for 2004. HIRI expects the pace of growth to slow over the next five years
The lumber & building materials category showed the largest percentage increase in spending last year, up almost 19 percent over 2003. HIRI estimates that hurricane repairs to residential structures will amount to $2.5 billion in product spending for 2004 and $1.5 billion in 2005.
HIRI forecasts more modest growth for home improvement product sales through 2009, with an average annual growth rate of about four percent.
For 2005, HIRI forecasts 3.4 percent growth in product purchases by consumers, and 3.8 percent growth in product sales to remodeling professionals for a total of $280.9 billion.
Sales of new and existing homes are a key driver of home improvement spending. HIRI anticipates some cooling in the housing market, but not collapse. "The impact of anticipated interest rate hikes should be somewhat offset by demographic trends," said Fred Miller, HIRI's managing director.
"The baby boomers are in their peak earnings years and their children, the
'echo boomers' are just entering the prime home buying years." Miller also noted that immigration continues to drive demand for housing.
HIRI is a not-for-profit that conducts a broad range of research on the U.S. residential improvement and repair market. This outlook, included in HIRI's semi-annual Size of Industry report, includes products purchased for existing residential structures, excluding new and commercial construction and nonresidential activities.
