Upbeat Long-Term Home lmprovement Forecast

The home improvement products market long-term forecast remains strong with a 6Eo average annual growth rate over the next five years. Sales in t997 are expected to reach $142 billion. The 1993 market is projected ro rotal $115.4 billion with an 8.87o increase over 1992 estimated figures, according to the latest Home Improvement Research Institute report.

While the economy is slowly emerging from the recession, the 1992 home improvement products martet appears to be on the road to recovery at a faster rate than total retail sales. Sales are estimated at $106.1 billion in 1992, closing 5.3Vo over revised 1991 sales of $100.8 billion, compared with a 4.2Vo pr$ected growth for total retail sales. Growth rates over the next five years are expected to continue !o surpass estimates for total retail sales.

The consumer market led the growth in home improvement products in 1992 with a 6.4Vo inqease over 1991 sales. Sales in 1993 are estimated to increase 7.l%o. Over the next five years, the consumer market is expected to grow at an average of 5.47o annually. This segment accounted for 69Vo of the 1992 estimated home improvement products market and will continue to represent over two-thirds of the market over the next five years.

Growth varies among the four major merchandise lines comprising the consumer sector. Lumber and building materials r€present about 45Vo of the sales. 1992 sales in this segment showed the strongest rebound over 1991. Sales will average 5.3Vo annual growth over the next five yea$.

Lawn and garden equipment and supply sales have been hardest hit, but are expected to rebound sharply with a 6.6Vo average annual five year growth forecast. Sales reprc&ntl9qo of consumer purchases.

Hardware, tools and plumbing, representing approximately 28Vo of total sales, are projected to grcw at an average rate of 5Vo over the next five years. Paints, preservatives and supplies, 87o of consumer purchases, will show a slighfly higher average annual growth rate of 5.2Vo.

According to revised projections by the Home Improvement Research Institute, the total professional remodeler market is estimated at $32.5 billion in 1992, 2.77o over 1991 revised sales of $31.6 billion. This market represents 30Vo of the total home improvement products market and is forecast to increase slightly, averaging 32Vo over the next five years.

The pent-up demand for major home improvements should drive the professional remodeler segment in the next few years. It is expected to grow by 1257o in 1993 to $36.6 billion. Growth will continue over the next five years at an average annual rate of 7.3Vo reaching $46.2 billion in 1997.

Regionally West South Central is expected to have a 6.8Vo avenge annual gfowth rate over the forecasted five year period with the remainder of the U.S. experiencing between a 5.6Vo and 6.2Vo avera$e annual growth rate. The South Atlantic, Middle Atlantic and West North Central are expected to perfonn below the national average of 6Vo.