R&R spending to top $100 biilion

By William T. Hausle Director, Market Planning Gold Bond Building Products

xnExolTURES for residen- b tial renovation and remodeline projects are almost certain to pass th6 $100 billion level in 1988.-Census

Bureau data shows that $91.3 billion were spent on renovation and remodeling in 1986. This figure should hit $98 billion in 1987.With used home sales running at a 3.5 million unit rate, 1988 promises to be another banner year for residential R&R. Close to $105 billion will be spent by homeowners next year for maintenance, repairs, additions and major replacements.

There are nearly 100 million new home units in the nation's housing inventory now, but the 3.5 million used home sales each year form the backbone of the R&R market. In the last three months, because of higher mortgage rates, used home sales have softened. But totals for 1987 should again exceed 3.5 million sales.

Third quarter 1987 witnessed sharp declines in the stock market which could hurt consumer confidence and result in buying cut-backs, such as new home sale cancellations or- postponements. The resulting effect on renovation and remodeling activity should be positive though-. Homeowners will be more likelv-to stay where they are and make needed or desired improvements to their present homes.

Gypsum wallboard usage in the renovation and remodeling market next year will exceed 1.5 billion square feet. Most of the wallboard will be used for room additions and completing existing unfinished spaces, such as basements and attics.

Only a small portion is used for repair work.

Vinyl siding has become the most frequently used material in the residential replacement market. Over I billion square feet will be used to reside existing homes in 1988. Usage has been growing by l0o/o or more and is concentrated in the northeast quarter of the country. However, this product is now being used in virtually all the R&R markets throughout the United States.

Story at a Glance

3.5 million used home sales fuel strong R&R market.

gypsum wallboard usage will exceed 1.5 billion sq. ft.... vinyl siding is most frequently used replacement material at 1 billion sq.ft.

year will bring for the pressure treated wood industrY, we might wish

HEN we look at the calendar and ask ourselves what next we had a gypsy to gaze into her crystal ball.

To shed some light on the future, we consulted with a cross section of Western Wood Preservers Institute members.

Some sources expect to see material shortages of lumber next year. Despite concerns, pressure treated wood continues to experience sales growth in lumber and sawn products. We see a strong demand for treated wood to continue. We may see some slowing in the first half of 1988 because of lumber supply limitations, but things look more promising for the second half of the year.

It is estimated that Pressure treated wood sales exceed $100 million in the Western states. Treaters are positive in their outlook towards sales in 1988. WWPI members are placing more emphasis on treated