Remodeling indicators show jump in current conditions

All current remodeling market indicators showed an increase in the second-quarter 2014 Remodeling Business Pulse survey from the National Association of the Remodeling Industry.

Remodelers are currently seeing growth from conditions in March, which concluded a decline in business conditions during the first three months of 2014.

“This quarter didn’t show much change in conditions driving growth,” NARI strategic planning committee chairman Tom O’Grady said in a statement. “People needing to do postponed projects remain the No. 1 driver at 80 percent, and improving home prices, at 59 percent, continues at No. 2. What is encouraging is that the value of jobs sold had a statistically significant growth.”

Economic growth, at 47 percent, was the No. 3 condition driving growth, a jump from 37 percent in March.

The three-month for outlook for business, though, declined for the first time since September, dropping in June to 6.32 from the previous high posted in March of 6.51. However, market activity remains positively weighted, with only 8 percent of remodelers reporting any level of decline versus the 70 percent who are seeing some level of growth.

“As the industry slowly recovers from the 2008 downturn and comparisons are being made to healthier year-ago periods, we may see these ratings soften some,” O’Grady said.

Many of the comments attribute the negative outlook to two common themes: pricing and lack of skilled labor.

Pricing continues to be an issue, with an underground economy of contractors cutting corners and underpricing professionals who follow a code of ethics, complying with local state and federal standards and health and safety guidelines. In addition, the difficulty in finding skilled labor seems to be holding companies back from taking on more work.

“Remodelers report that shortages are particularly acute for trained workers with basic carpentry skills to work in the field,” O’Grady says.