Home Improvement Thrives

Housing starts and existing home sales stayed at a high level throughout 2005. Both are expected to post increases of over 4 percent for the year.
Mortgage rates may be on the rise, but the home improvement industry remains strong. Total home improvement product sales in 2005 are estimated to have reached a new record of $291 billion - up 7.5 percent. With the help of continued hurricane rebuilding activity, 2006 sales are expected to increase an additional 4.6 percent to $305 billion.

These estimates have been developed as part of an ongoing Home Improvement Research Institute (HIRI) program by one of its suppliers, Global Insight. According to its most recent study, housing starts and existing home sales - strong coincident indicators for home improvement activity - stayed at a high level throughout 2005; both are expected to post increases of over 4 percent for the year.

"With the housing market beginning to show a gradual slowdown, there has been some talk that the home improvement industry will suffer its effects," said Fred Miller, managing director of the HIRI.

"But housing turnover is only part of the picture. A large piece of the home improvement market involves maintenance and repairs as well as improvements to homes where there is no change in ownership. This makes the home improvement industry far less cyclical than new home construction."

Even the most current data points to the continual health of the home improvement industry. In recently released data from the U.S. Department of Commerce, December retail sales for building material and garden equipment/supply dealers grew 9.7 percent over the same period in the prior year. This growth was significantly above retailing in general.

Continued hurricane rebuilding efforts will also help to offset the effects of a market slowdown well into 2006. In particular, the professional market, stimulated by the repair and rebuilding efforts, was up by 8.4 percent for 2005, outperforming consumer market sales.

The long-term outlook for the market remains strong. Global Insight projects an average of 4.6 percent total market growth in constant dollars for 2008 through 2010 - below the pace of the past five years, but well ahead of the rate of overall economic growth.

The Home Improvement Research Institute is a membership-based, independent, nonprofit organization of manufacturers, retailers, wholesalers and allied organizations in the home improvement industry. Its mission is to be recognized as the primary authority for effective, useful information about home improvement products and services in North America. The membership of HIRI currently represents over 70 of the leading firms in the industry.

Publication date: 02/27/2006

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

You must login or register in order to post a comment.



Image Galleries

2015 ACCA Conference

Images from the 2015 ACCA Conference in Grapevine, Texas. Posted on April 8, 2015.


NEWSMakers: Leslie McDowell

Leslie McDowell, director of communications at the Building Performance Institute Inc., discusses the nonprofit organization's new homeowner centric website. Posted on April 10.

More Podcasts


NEWS 04-13-15 cover

2015 April 13

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe

Global Warming

Do you believe in man-made global warming?
View Results Poll Archive


2015 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research


Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.


Magazine image
Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.


facebook icontwitter iconyoutube iconLinkedIn i con