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Remodeling Market Index
Back to 2005 Levels
WASHINGTON, D.C.
From Remodeling Magazine
The Remodeling Market Index (RMI) climbed five points to 50 in Quarter 3, 2012, according to the National Association of Home Builders (NAHB). Released today, the RMI is at its highest point since the third quarter of 2005, tracking the positive trends recently seen in the rest of the housing sector.
The new numbers are in line with what has been occurring in the housing market as new-home prices are on the upswing, combined with homeowners finally upgrading their houses, according to Paul Emrath, vice president for Survey and Housing Policy Research, NAHB.
"A lot of homeowners have just gotten tired of putting things off and are now undertaking projects to make their homes more attractive and comfortable," he says. "It's possible that the stability of house prices is helping by giving them some confidence that improvements they make will be more likely to hold their value."
The RMI is based on a quarterly survey of NAHB remodelers that asks them to rate current remodeling activity along with indicators of future activity, i.e., calls for bids. An RMI below 50 indicates that more remodelers report market activity is lower (compared with the prior quarter) than those who report higher market activity.
"It's good to be up to 50 and over 50 in current conditions," Emrath explains, adding that "50 is sort of a break-even point when equal numbers of remodelers report better than worse conditions."
Pent up Demand for Remodeling
All three indicators of current market conditions improved: maintenance and repairs rose to 56 (from 50); minor additions and alterations to 51 (from 47); and major additions and alterations to 49 (from 42). Current market conditions improved or held steady in all four regions in the third quarter of 2012.
Current remodeling activity was particularly strong in owner-occupied housing; the subcomponents of the current conditions index for owner-occupied housing were all well over 50, ranging between 55 and 60.
Future market indicators in every region but the Northeast experienced gains from the previous quarter: Northeast, 38 (from 41); Midwest, 50 (from 46); South, 52 (from 46); and West, 52 (from 42). All indicators of future market conditions rose: calls for bids, 48 (from 44); amount of work committed for next three months, 46 (from 43); backlog of remodeling jobs, 50 (from 46); and appointments for proposals, 51 (from 43).
These numbers echo the Leading Indicator of Remodeling Activity (LIRA) released last week by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, which showed a significant uptick in remodeling activity with a positive outlook for continued growth well into 2013.
Based on the data from the RMI, Emrath says that remodelers should anticipate some increase in business going forward. "We think that there (are) still projects that have been put off and pent-up demand to release," he says. But he cautions that there are still some constraints present that could pose problems such as "uncertainty over macroeconomic conditions; it can still be difficult getting financing, especially on larger projects."
- Mark A. Newman, senior editor, REMODELING
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Economic Growth Picks Up
in the Third Quarter
CHARLOTTE, NORTH CAROLINA
From Wells Fargo Economic Group
Real GDP growth in the third quarter advanced at a 2.0 percent annualized pace following the second quarter's 1.3 percent pace. As implied with the pick-up seen in the weekly and monthly sales data, consumer spending was a key driver, rising at a 2.0 percent annualized pace on the strength of durable goods. Further modest job gains combined with a rising stock market have boosted consumer confidence in Q3 and have lifted expectations that this positive spending momentum can continue in the fourth quarter.
Improvement was seen in residential construction, up 14.4 percent,
and government spending, up 3.7 percent, each at an annualized rate.
On the flip side, slowing global growth and concerns over the fiscal cliff
continue to weigh on exports and business capital expenditures.
Exports fell for the first time since Q1 2009, contracting at a 1.6 percent annualized rate. Our more immediate concern, however, is the reversal of momentum in capital investment. Growth in business fixed investment slowed to a 1.5 percent pace as equipment and software spending remained flat.
Significant contraction is likely in the current quarter given the substantial decline we saw in yesterday's core capital goods orders performance.
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Portable Outdoor Music Systems
Add Flavor, Fun and Profits
NEW ORLEANS, LOUISIANA
Soundcast Systems, developer and manufacturer of high-performance wireless music systems, will be exhibiting for its first time at the upcoming 2012 International Pool/Spa/Patio EXPO in New Orleans (Booth #2077), as demand in the outdoor entertainment, pool/spa and furnishings markets grows.
Soundcast will show pool, spa and patio furnishings dealers and distributors how to easily increase profits while adding a fun and appealing aspect to every proposal and sale with its portable outdoor music systems. By offering cutting-edge portable outdoor and indoor music entertainment as an option for clients, dealers can readily differentiate their business as a step above the competition.
The OutCast series of weather-resistant music systems delivers clean crisp sound, deep bass and wirelessly signals (tunes) from inside the house to the outdoors, patio or pool area with simplicity like no other. The entire family can use Smartphones or any MP3 device including your PC or Mac with iTunes and Cloud music as the source.
All OutCast highly robust wireless music systems transmit 2.4-GHz signals long-range allowing you to enjoy rich Omni-directional premium sound from your iPod, iPhone, Android, MP3 Player, Internet radio and other sources for up to 20 hours of uninterrupted wireless sound. Listen anywhere and anytime - Inside the house, front-yard, barbecue patio, poolside, tailgating at the stadium, and even on your boat or RV.
Furthermore, to add spice and flavor to its speakers' design appeal, Soundcast partnered with Skinit, the leader in on-demand personalization for electronics. At Skinit.com customers can browse and select any design from their vast online library of colors, patterns, photography, art, professional sports leagues, colleges, universities and even customize - from bold to aesthetically pleasing and neutral, the design choices are extensive. The skin wraps are an easy-on application as well as a "residual-free" removal for all products.
Visit Soundcast Systems at the 2012 International Pool/Spa/Patio Expo, November 6-8 in New Orleans, Louisiana, Backyard Living Pavilion - Booth #2077.
Visit the Website.
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Consumers On a Spending Spree?
CHARLOTTE, NORTH CAROLINA
By Wells Fargo Economic Group
In what seems to be a repeat of pre-recession behavior, U.S. consumers are following their sentiment and re-engaging again in the economy. Most of this re-engagement seems to be coming from a draw-down in either savings or an increase in borrowing, or both, rather than an increase in income.
We believe this spending trend may not be sustainable entering into 2013 if we do not see a significant improvement in the labor market. We believe this increase in consumption is at odds with the high probability that some taxes are going to increase early next year.
Consumers may be trying to preempt this increase in taxes in the future by consuming today because they know they may not be able to increase consumption as much next year.
In any case, we still believe that this improvement in consumption is not sustainable and, while consumers still have some leeway, i.e., they can continue to save less to support higher consumption in the coming months, the end of this behavior is probably in sight. This is especially true, in our opinion, if personal income and employment does not improve considerably.
Of course, consumers could be, once again, starting to use
more credit, supported by an improvement in consumer confidence, but this, also, has to have some more real support to make this behavior sustainable in our view.
Personal consumption expenditures increased 0.8 percent during September after increasing 0.5 percent in August. However, due to inflation, real consumption expenditures increased by only half that
measure - 0.4 percent. This was up from an increase in real consumption expenditures of 0.1 percent in August.
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