Report: Housing Market & Hurricanes Drive 12.6% Hi
Tampa, FL, June 20, 2005 – Total home improvement product sales reached $271 billion in 2004, the highest on record since the Home Improvement Research Institute (HIRI) began tracking this data in 1984. Spending increased 12.6 percent from 2003 levels.
Home buying and selling is a key driver of home improvement activities, and unfortunately, so are natural disasters. Last year’s hurricanes in Florida are estimated to have added a full percentage point to 2004’s growth rate.
HIRI has raised its estimate for home improvement product purchasing in 2005 to $287 billion, from a prior estimate of $281 billion issued in November 2004. Consumers are responsible for about three-quarters of home improvement product purchases and HIRI expects gains of 5.9 percent in 2005 product sales to consumers. Sales to home improvement professionals are expected to increase 5.3 percent.
The increased estimate is based on residential housing activity and other economic factors, and did not consider forecasts for the 2005 hurricane season.
The long-term outlook for the home improvement products market remains strong, although HIRI’s most recent quarterly Home Improvement Consumer Project Activity & Sentiment Report showed some softening in planned remodeling for the second quarter. Total market growth for home improvement products sales from 2006-2009 is projected to average 4.6 percent per year in current dollars.
“There is a strong underlying trend of discretionary upgrades, driven in part by the active housing market and the baby boom generation in its peak earning years,” said Fred Miller, managing director of HIRI. “But there is also the repair and replacement side of remodeling fueling the industry from year to year, driven by the aging housing stock, as well as damage from accidents and disasters.”
Total hard-surface floor coverings sales to consumers for 2004 were $4.3 billion, up about seven percent from 2003. HIRI forecasts $4.5 billion in total hard-surface floor coverings sales for 2005. Total soft-surface floor coverings sales to consumers for 2004 were $11.4 billion, up about six percent from 2003. HIRI forecasts about $12 billion in total soft-surface floor coverings sales for 2005.
