Deep into the year's remodeling season, remodelers are reporting the highest overall rating on overall business conditions at 6.31, up from 5.97 reported during the first quarter. This rating has steadily increased in the six quarters NARI has been tracking results.
"This summer, many companies entered the season with a backlog of jobs, which is something most haven't seen in the past few years," said Tom O'Grady, chairman of NARI's Strategic Planning & Research committee and president of O'Grady Builders in Drexel Hill, Pa.
"What's also positive is that the inquiries and bid requests are still steady, which provides more market stability for remodelers," he added.
Growth indicators in the second quarter of 2013 show:
* Current business conditions up 5.7% since last quarter;
* Number of inquiries up 4.7% since last quarter;
* Requests for bids up 3.3% since last quarter;
* Conversion of bids to jobs up 4.6% since last quarter; and,
* Value of jobs sold is up 5.9% since last quarter.
This trend is expected to continue, as remodelers predict that three months out, their sales will be as strong as they are now. The No. 1 and 2 reasons for growth continues to be postponement of projects (up 5% at 87%) and improvement of home prices (up 6% to 65%), but economic growth also has moved into the No. 3 reason for growth, at 49% (up 7%).
"As consumer confidence has increased, so has the confidence of the remodeling community," O'Grady said. "It appears that everyone has finally settled into this 'new normal' economic picture, and more bids are turning into remodeling projects, and at higher price points."
Remodelers, although optimistic, remain cautious about the future, with the outlook going down 1.3% in the last quarter.
Other significant contributors to overall activity:
* Certainty about the future was reported by 47% of respondents;
* Low interest rates were reported by 35% of respondents (the lowest rating in three quarters); and,
* Growth in the stock market was reported by 37% of respondents.
"One of the things we saw from the comments of the second-quarter is that many homes were impacted by disasters in the past three months, from the storms along the East Coast, tornadoes in Oklahoma and the explosion in Texas," O'Grady said. "Remodelers in those areas are involved in the cleanup, and that's impacting their businesses."