When the economy is sluggish, home remodeling often falls by the wayside in favor of basic maintenance. With the general economy picking up these days, however, there’s been a promising and steady increase in spending on remodeling.
The National Association of Home Builders uses its Remodeling Market Index (RMI) to measure the level of activity in the remodeling market. An RMI of over 50 shows more remodelers reported increased activity than reported decreased activity. In fall 2014, the RMI rose to 57, a high not seen in some time.
All factors measured showed improvement, including amount of work committed for the next three months and backlog of jobs.
Other indicators are also showing growth, although the rate may be slowing. Harvard University’s Remodeling Futures Program uses the Leading Indicator of Remodeling Activity (LIRA) to monitor growth in this area. The LIRA forecasts the remodeling business growth rate will fall to 3.1 percent through the summer of 2015.
A survey by GuildQuality, a consumer satisfaction firm, found 72 percent of residential construction professionals questioned expected their business to grow in some way in the next six months and 73 percent have a favorable outlook for the market as a whole. On the other hand, only 45 percent predicted improvements in the housing industry.
These increases are in keeping with the positive trend that’s displayed growth for six straight quarters. The upward trend in home renovation and remodeling reflects a gradual yet steady improvement in whole housing market, which is expected to continue.
The path to full recovery isn’t without obstacles, however. In some parts of the country, construction firms are facing a shortage of subcontractors. Many in the industry are also finding qualified labor hard to come by.
A survey conducted by the Associated General Contractors of America (AGC) found that while 86 percent of surveyed construction industry firms wanted to hire more workers in 2014, some 62 percent of firms were unable to fill their open positions for skilled professionals and craftspeople.
To keep up on the latest trends in home remodeling, contact us at Construction Monitor.
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