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Upbeat Assessment For Remodeling Industry
Upbeat Assessment For Remodeling Industry


The Remodeling Market Index, a gauge of market activity in the home remodeling industry, has been in positive territory for the past three years.

Home remodeling industry executives continue to be bullish about their prospects for growth and expansion, as reflected in the fourth quarter Remodeling Market Index.

The National Association of Home Builders maintains the RMI, and its fourth quarter reading was 58, one point higher than the third quarter of 2015.

Any score above 50 shows that more remodelers saw higher market activity in the quarter, as opposed to lower. But it is also an indication of what remodelers believe the future holds for the market.

"Remodelers' outlook on the market has been positive for the past three years," said Robert Criner, chairman of the Remodeling Index. "Most importantly, the confidence has been continuous over this period. Professional remodelers have been hard at work rebuilding the sales pipeline during the past several years, and the RMI results are the proof that it's paid off."

On a regional basis, RMIs for the Northeast and West moved up two points to 66 and 63, respectively; improved one point to 57 in the South; and remained unchanged at 58 in the Midwest.

"The steady, performance of the RMI over the past six quarters is consistent with our projection for continued modest growth in remodeling spending," said David Crowe, chief economist for the NAHB. "Constraints to faster growth include labor shortages and homeowners who are having trouble obtaining loans for larger projects." Dodge Index Jumps 4.1 Percent in December
Solid gains in commercial and institutional projects helped drive the Dodge Momentum Index 4.1 percent higher in December.

The DMI rebounded nicely from a 3.6 percent loss in November, compared to October. It improved to a reading of 125.2 in December, from 120.3 the previous month.

The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning. These reports typically lead construction spending by a full year.

Separately, institutional projects jumped 4.7 percent in December, and commercial projects moved 3.6 percent higher.

The DMI finished the year 2.4 percent higher, compared to its reading at the end of 2014. The year-over-year improvement was hampered by a 6.7 percent decline in commercial projects.

"Renewed growth in planning activity for the commercial sector is expected to take place in 2016, supported by strong industry fundamentals such as vacancy rates and employment," Dodge Data and Analytics said.

Institutional projects climbed 15.8 percent in December year-over-year, helped by the passage of recent construction bond measures and sound economic conditions.

Source: Dodge Data and Analytics

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July 17, 2019, 8:24 pm PDT

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