2014-02-14 10:27:04 - Remodeling in the US - Industry Market Research Report - a new market research report on companiesandmarkets.com
The United States remodeling market´s foundation shook as the housing bubble burst, with a number of factors combining to discourage consumers from spending on home improvements. Including do-ityourself (DIY) projects, spending on home improvements is expected to grow at an anemic annualized rate of 0.4% over the five years to 2013. Sharp increases in unemployment during the recession led to lower homeownership rates and less disposable income, causing homeowners to delay professional remodeling and turn to DIY projects, hurting industry demand.
However, since 2011, firms have benefited from increased consumer disposable income. Additionally, low mortgage rates and low (but rising) prices are expected to yield a rising homeownership rate in 2013.
Furthermore, higher property values are supporting homeowners´ ability to finance remodeling
projects. As a result, industry revenue is expected to grow 7.1% in 2013 to total $48.9 billion.
However, the recession´s effects and the long, difficult recovery are expected to lead industry revenue to contract at an annualized rate of 0.6% during the five years to 2013.
Falling demand required firms to intensify price competition to attract new projects, causing profit to contract during the recession. Smaller firms suffered from poor conditions because their services are more easily substituted by DIY projects. This decreased revenue for smaller firms caused a higher rate of industry exits during the recession. Firms also hired fewer subcontractors to curb costs, reducing the number of workers at an annualized rate of about 0.8% during the past five years.
During the five years to 2018, industry recovery will be driven by improvements in employment and per capita disposable income. Housing prices are expected to continue rising, allowing demand for industry services to rise because homeowners often leverage the value of their home through loans to fund remodeling projects. In addition, despite projected increases in mortgage rates, they will remain historically low. As a result, the percent of homeowners is projected to increase to about 67.3% in 2018, expanding the pool of potential clients.
Consequently, revenue is projected to climb at an annualized rate of 4.6% to $61.1 billion during the next five years.
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