Washington, DC (PRWEB) January 31, 2011
The level of remodeling project activity nationally remained flat in the fourth quarter of 2010 relative to the third quarter, according to the latest release of the Residential Remodeling Index (RRI) by Hanley Wood. The seasonally adjusted fourth quarter national composite of the RRI registered a score of 80.75, which was a decline of 0.7% over the slightly upwardly revised third quarter result of 81.3. The change was not statistically significant, so for the last two quarters of 2010, remodeling activity remained above the levels in 2009 but failed to show improvement.
The first half of 2010 had shown remodeling activity was on the rebound with the bottom having been recorded in the last quarter of 2009. The 2010 improvements had been the first since the beginning of 2007. The RRI measured the peak to trough for remodeling activity was a decline of 20%, but the last two quarterly readings of the RRI indicated that the recovery stalled.
Hanley Wood is now forecasting remodeling activity to remain effectively flat at current levels in 2011 before recovery begins in earnest in 2012.
“Our updated forecast for remodeling is conservative because our model did not see a rise in activity in the fourth quarter of 2010 and our local market economic forecasts have yet to reflect improved expectations for local economies in keeping with recently revised macro expectations for the U.S. GDP.” said Jonathan Smoke, Hanley Wood’s Executive Director of Research. “The national numbers mask the fact that many markets now have improved expectations for ending 2011 with more activity than 2010.”
“We created the RRI to measure local market activity and we are seeing significant differences in activity and expectations for local markets in 2011 that get averaged out in the national numbers. Our top ranked markets are performing better than the national average, and some markets are seeing increases in activity already,” says Smoke. “For example, our top 5 markets, based on expectations for 2011 and market demand, are Minneapolis, Houston, Dallas, Austin, and Denver. These markets all have levels of activity that are recovering towards their 2007 market peaks, and they also have very deep potential demand.”
Commenting on the conservative forecast for 2011, Smoke added, “2011 seems to be starting with better expectations for the economy than we’ve seen for the last three years. If that ripples into improving consumer confidence, I wouldn’t be surprised if our first quarter 2011 results come in better than our current forecast, which will raise our expectations for the rest of the year.”
The RRI results confirm anecdotal evidence of varying remodeling activity around the country. "We are hearing very mixed messages—some markets continued to show strength at the end of 2010, but some markets indeed seemed to slow down relative to how they started the year,” says Rick Strachan, Hanley Wood’s Executive Director, Residential Remodeling. “But there are some early signs that 2011 is starting off on a good pace and remodeler attitudes seem to be improving, so perhaps the industry will indeed see better results than we are currently conservatively expecting to be similar to 2010.”
Now a year since the release of the first RRI, Hanley Wood has expanded the scope and breadth of what the RRI can offer with the introduction of Local Market Reports. These reports make the use of the RRI more actionable—giving building product manufacturers, dealers/distributors, as well as contractors information needed to monitor a local market’s level of activity, economic conditions and forecast; understand consumer demand and where to focus locally by zip code; and learn insights into the profile for the best consumer households to target for remodeling and replacement projects. “We’re excited to offer a range of marketing solutions for building product manufacturers and contractors—all powered by the RRI,” says Strachan. For more information on the Local Market Reports and to order, go to https://reports.housingintelligence.com/report/local-market-rri-report
About the Residential Remodeling Index
The RRI is a quarterly measure of the level of remodeling activity in 366 metropolitan statistical areas (MSA) in the U.S., with the national composite reflecting the national level of activity. “Activity” includes home improvement and replacement projects, but does not include maintenance or projects of less than $500. The seasonally adjusted index shows the relative level of activity in the geography specified (MSA or national composite) compared to 2007 (the baseline year). A number above 100 indicates a level of remodeling activity higher than the level of activity at the beginning of 2007, which was the peak of remodeling activity in the prior decade.
The index is produced through a statistical model that leverages detailed data on remodeling activity, including household level remodeling permits, and consumer reported remodeling and replacement projects. Quarterly historical results for the national composite and for each of the 366 Metropolitan Statistical Areas in the U.S. are available back to 2004.
About Hanley Wood
Hanley Wood is a leading business-to-business media company focused on the residential and commercial construction and design industries. Its diverse portfolio includes magazines, Websites, e-newsletters, exhibitions and conferences, custom marketing and data services.
Hanley Wood is comprised of four operating platforms: Business Media, which publishes more than 30 magazines, featuring BUILDER and ARCHITECT magazine, along with related Websites, e-newsletters, and conferences; Exhibitions, which produces marquee events such as World of Concrete, bringing residential and commercial construction professionals face-to-face with manufacturers, suppliers, distributors, and service providers; Market Intelligence, which collects and aggregates proprietary data sets that capture hundreds of pieces of profile and material information about housing developments in more than 75 housing markets; and Marketing, which plans, creates, and executes strategic and integrated marketing solutions for its clients. http://www.hanleywood.com.