Housing prices have begun to rebound, driving increased household investment
Los Angeles, CA (PRWEB) August 31, 2012
The Deck and Patio Construction industry designs, builds and maintains outdoor living spaces, including sunrooms, decks, porches and patios for residential and commercial clients. Industry firms perform new construction, reconstruction (i.e. the rebuilding of something after it has been destroyed), repairing and cleaning work. Similar to other construction industries, demand for the Deck and Patio Construction industry has been volatile over the five years to 2012. “When the housing market crashed in 2007 and the recession hit in late 2008 and carried on through 2009, homeownership rates declined, housing starts dropped, foreclosures hit record highs and housing prices fell,” says IBISWorld industry analyst Radia Amari. “These trends resulted in decreased demand for industry services.” Over the five years to 2012, industry revenue fell at an estimated average annual rate of 1.9% to $31.1 billion.
In the past two years, industry revenue turned the corner, benefiting from the slow rebound in per capita disposable income and the recent increase in existing home sales and housing prices. And in the past year, existing home sales and housing prices have begun to rebound, “driving increased household investment in new additions and remodeling projects to increase selling values,” says Amari. “The industry also benefited from renewed growth in housing starts, with most including covered patios or porches.” According to the National Association of Home Builders, 62.0% of new homes completed in 2009 included porches. Tax credits offered to homeowners to invest in energy-efficient upgrades to windows, doors and roofs have also spurred demand for Deck and Patio Construction industry services.
With a rebounding housing market, there will be greater demand for outdoor spaces in the coming years. According to a 2012 Professional Builder magazine survey, almost 53.0% of respondents believe it is more important that outdoor living features are part of new home sales today than two years ago. In turn, an increasing number of operators will enter or reenter the industry (a significant number of operators left the industry between 2007 and 2010). Small, locally operated firms with fewer than 10 employees (including subcontractors) make up the majority of the industry. Due to the small size of deck and patio construction firms, they are more likely to exit the industry during a downturn. The industry contracted quickly as a result of the recession and declines in demand for deck and patio construction over the five years to 2012. During the next five years, however, as demand for construction increases, the number of industry firms is expected to grow. For more information, visit IBISWorld’s Deck and Patio Construction in the US industry report page.
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IBISWorld industry Report Key Topics
This industry constructs outdoor living areas, including decks, patios and sunrooms, for residential and commercial clients. Industry operators perform new construction, reconstruction and repairs.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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