Qualified Remodeler Magazine

FEB 2015

Qualified Remodeler helps independent remodeling firms to survive, become more professional and more profitable by providing must-have business information, namely best business practices, new product information and timely design ideas.

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Page 35 of 60

third and fourth quarters, the LIR A predicts much more moderate growth — only 1.6 percent by the third quarter this year. Te culprit is pending home sales, which fgures prominently in LIR A's basket of data points, says Harvard analyst Abbe Will. "Te three main inputs that are contributing to the LIR A slowdown are contractor sentiment [NAHB's Remodeling Market Index], housing starts and pending home sales," says Will, who helped formulate the LIR A. "Both the RMI and starts measured have been softening on a year-over-year basis, but are still showing healthy, mid-digit growth, whereas pending home sales have now gone negative year over year and are the main element dragging the LIR A down to the 1.6 percent growth reported in Q3." WHAT REMODELERS SEE FOR 2015 In January, Qualifed Remodeler polled remodelers for their outlook for 2015. Nearly 80 percent of the respondents judged the coming year to be "good" or "excellent", while 19.7 percent and 0.8 percent said the coming year would be "fair" or "poor", respectively. Tis over- whelmingly positive outlook corresponded to increased expectations in most measures — more leads, more jobs and higher revenue this Activity by Job Type Hiring Plans According to the American Housing Survey, discretionary improvements are the biggest part of the remodeling pie. When that pie is broken down, it shows a somewhat balanced distribution of activity between exterior and interior projects. Kitchen and bath activity combined accounts for the second highest amount of discretionary improvements behind exterior replacements. The greatest challenges for remodelers relate to the economy and the labor market. Finding and retaining new, qualified employees will certainly occupy much of a remodeler's time in 2015. Fifty-five percent of remodelers plan to hire new employees in 2015, and another 30 percent are on the fence about hiring. 55.1% Yes 29.1% It depends 15.7% No Note: Tabulations use JCHS-adjusted weights. Other room additions and alterations include outside attachments. Source: Qualified Remodeler Forecast Survey, 2015. 7.7% Bath Remodels and Additions 13.1% Other Room Additions and Alterations 15.7% System Upgrades 20.3% Exterior Replacements 9.5% Kitchen Remodels and Additions 8.2% Disaster Repairs 13.7% Property Improvements 11.8% Interior Replacements Homeowner Spending in 2013 = $192 B Remodelers' Greatest Challenges Source: Qualified Remodeler Forecast Survey, 2015. Economy in general Labor availability Consumer fears Banks/Lending Material prices Other Government regulation 34.6% 26.0% 13.4% 12.6% 4.7% 4.7% 3.9% QualifiedRemodeler.com | ForResidentialPros.com QR February 2015 35

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