The National Association of the Remodeling Industry’s (NARI) first-quarter 2014 Remodeling Business Pulse (RBP) data of current and future remodeling business conditions show current condition ratings fell significantly in March.
Business conditions during the first three months of 2014 dropped to 6.07, down from 6.41 in December. There was a decline in all but one of the sub-components that drive the overall current rating. Conversion of bids and sales value of jobs had the largest dip.
However, strength of sales in this three month period increased to 6.51, from the 6.41 reported during the fourth quarter of 2013.
“The harsh winter seemed to have played a role in the decline of our numbers this quarter,” says Tom O’Grady, CR, CKBR, chairman of NARI’s Strategic Planning Committee.
Despite the low ratings for current business conditions, remodelers are more optimistic about the future, heading into their busy season. The outlook for business three months out reached a new all-time high of 6.51, from 6.41 in December 2013.
Growth indicators in the first quarter of 2014 are as follows (rating is from 1 to 9, where 1 is much worse than a year ago and 9 is much better; 5 is about the same as last year):
- Current business conditions fell to 6.07 (from 6.51 last quarter);
- Number of inquiries remained flat at 6.24;
- Requests for bids had a slight drop to 6.16 (down from 6.22 last quarter);
- Conversion of bids fell significantly from 6.03 to 5.71; and
- Sales value of jobs sold declined to 5.84 (down from 6.27 from last quarter).
“Postponed home maintenance issues continue to be a large driver for projects,” O’Grady says. “However, homeowners remain slow to make the decision to move ahead with higher-priced projects, which is still the biggest barrier to growth.”
When asked about what is driving growth, remodelers had responses similar to those seen in the last few quarters. Activity is being driven by several factors:
- Postponed projects continue to be the number-one factor in remodeling business growth, at 81 percent, up from 75 percent in December;
- Improving home prices was at 59 percent, down from 61 percent in December; and
- More certainty about the future moved into the number-three spot, at 39 percent.
“From the comments on the RBP survey, remodelers still feel this will be end up a strong year for business,” O’Grady says.