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"Now we can have conversations about whether issues like labor availability will be a constraining factor next year," Tomalak explains. "For example, we are expecting big-project owner remodeling to grow fastest of all the subsets next year by almost 10 percent. But we do not think that labor availability will be a problem because we are only anticipating 2 percent project growth in that subset. If there is only 2 percent project growth, the rest of the gain must be driven by trade-up in spending per project." Burns' national forecast of remodeling is just a frst step. Eventually, Tomalak says, the frm plans to create regional and metro forecasts of remodeling activity. "We don't have them yet, but we are driving there. It is a matter of time until we have it, but it is underway," he says. "We want to make sure we brought out our national-level information early so we could get a sense of what is valuable." ESTABLISHING NEW BENCHMARKS Te Burns Residential Repair and Remodel Spending forecast comprises several component parts — owner big project, owner small project, rental small project, rental big project and disaster repair. In 2016, it is projected that owner small project (under $5,000) will lead the way with $142.6 billion in activity. Owner big project will follow with $72.9 billion in activity, then rental big project with $56.1 billion, rental small projects with $18.4 billion and disaster repair at $10.5 billion. Te break point of $5,000 as the cutof between small projects and big projects was determined by studying project data and monitoring the levels of revenue at which careful 2007 $284.9 $270.5 $233.1 $215.0 2.8% 5.9% 1.5% 23% 29% 39% 8% 4.9% $247.1 $237.3 $240.3 $265.6 $278.6 $300.5 $350 $300 $250 $200 $150 $100 $50 $0 6% 5% 4% 3% 2% 1% 0% Remodeling Spending, $Billions 2015 YOY % Growth Billions $USD 2008 2009 2010 2011 2012 Harvard Joint Center LIRA Forecast Focus generally on owner big projects Covers owner and rental Burns Residential Repair and Remodel Spending 2013 2014 2015P 2016P Burns Residential Repair And Remodel Spending™ ■ Small Project Discretionary ■ Big Project Discretionary ■ Disaster Repairs Remodel Forecast Comparison ■ Big Project ■ Small Project ■ Total (Including Disaster) 2014 Spending on Residential Construction by Category Source: John Burns Real Estate Consulting, LLC (Data: July-15, Pub: Sep-15) Using American Housing Survey data and several other proprietary inputs, John Burns Real Estate Consulting LLC developed a model that forecasts repair and remodel activity. It projects growth of 4.9% in 2015 and 7.8% in 2016, increasing to $300.5 billion. Source: John Burns Real Estate Consulting, LLC; Harvard Joint Center for Housing Studies (Data: Jul-15, Pub: Sep-15) JBRC breaks out big project and small projects. Its outlook for big projects is more positive in 2015 than other forecasters due to gains in rental and bigger tickets. Source: John Burns Real Estate Consulting, U.S. Census (Data: May-15: Census, Aug-15; JBREC, Pub: Sep-15) In 2014, residential repair and remodeling accounted for $266 billion (53%), exceeding the $235 billion spent on new residential construction. Big-project R&R; $113.6 Small-project R&R; $146.1 Disaster repair $5.9 - 1% New Single-family Construction $193.6 New Multifamily Construction $41.8 QualifiedRemodeler.com QR October 2015 21