Conducted in late September, the third-quarter 2015 NARI Remodeling Business Pulse (RBP) data of current and future remodeling business conditions found a softening of the growth rates in the industry.
On a 1–9 scale, the average rating was a 6.03 (above 5 indicates growth). This was a statistically decline versus the 6.48 recorded in June. While still positive, this rating points to slower growth.
Looking at the subcomponents of the current conditions showed broad weakness versus the prior quarter. The drop in “Number of inquiries” was statistically significant. Only “Conversion from bids to jobs” avoided declines (it was equal to the prior quarter).
- Number of inquiries was at 6.03, down 4.6 percent
- Requests for bids came in at 6.02, down 4.0 percent
- Conversion of bids to jobs was unchanged at 5.81
- Value of jobs was 6.19, a 4.6 percent decline
These results point to a slowdown in the rate of industry growth with a drop in inquiries leading the way.
Growth drivers continue to be led by “postponed projects” which was mentioned by 61 percent of remodelers, a decline from the prior quarter. Improving home prices are now the No. 2 driver for growth.
“Remodelers are becoming more realistic and accepting of the slow growth other economic indicators are confirming,” says David Merrick, MCR, UDCP, of Merrick Design & Build and chairman of the NARI Strategic Planning & Research Committee. “Our businesses are becoming stronger and that is good, but not as fast as it once was. We are adjusting to slow sustainable growth and are less optimistic, more realistic about what the future will bring. Our customers are being careful about budgeting and taking on bigger projects so leads may be down a little, but the leads we are getting are more focused and on target and budget oriented.”
Looking at the expectations for business three months from now, the picture is similar. The average rating was 5.79 a significant decline from last year’s 6.07. Still the majority, 53 percent, of remodelers see growth versus only 15 percent seeing any level of decline.
Click here to review the complete 3rd Quarter RBP. Original entry on NARI’s website can be found here.