AHMA Confidence Index Improves Slightly in August
Manufacturers also report doubts on new export prospects to Russia and the need for more economic stimulus.
The American Hardware Manufacturers Association’s AHMA Home Improvement Industry Confidence Index’s Current Situation Index improved in August to 279.2 from 262.5 in July (October 2008 = 100), while the Future Expectations Index also increased slightly to 212.1 from 210.3.
In comparing current sales levels to year-ago levels, 67 percent of respondents said sales were higher in August versus year-ago levels, up from 63 percent in July. For August, 26 percent reported sales were even, and seven percent said sales were below year-ago levels.
Looking forward six months, 56 percent of August respondents said they expect sales to be above current levels, up from 44 percent in July. In August, 33 percent of respondents said they expect sales to be even in six months and 11 percent expect sales to be below current levels.
Looking forward one year, 67 percent of respondents project sales will be higher, down from 78 percent who felt that way in July. Twenty-six percent of August respondents project sales will be even one year from now and seven percent project sales will be below current levels.
“Hot Topic” Questions
The August Confidence Index survey asked two supplemental questions of AHMA members:
“Russia has recently been accepted as a member of the World Trade Organization. Do you feel this will help U.S. manufacturers export more products to Russia?” and “Reports in the Wall Street Journal and elsewhere say the Federal Reserve is considering new actions to boost the economy. Do you think more economic stimulus is needed?”
To the first question, on trade with Russia, 22 percent responded “Yes,” 44 percent responded “Not Sure,” and 33 percent responded “No.”
On the need for more economic stimulus, 31 percent responded “Yes,” 12 percent responded “Not Sure,” and 58 percent responded “No.”
Other Monthly Economic Reports:
Retail sales of home improvement products (NAICS 444) rose one percent in July to $23.684 billion from $23.456 billion in June, according to a Census Bureau report. Sales were also up 1.0 percent from July 2011 levels. For the first seven months of the year total sales are up7.2 percent to $173.379 billion.
Estimates for all retail sales in July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $403.9 billion, an increase of 0.8 percent from the previous month and 4.1 percent above July 2011. Total sales for the May through July 2012 period were up 4.3 percent from the same period a year ago. The May to June 2012 percent change was revised from -0.5 percent to -0.7%.
Existing-home sales grew 2.3 percent to a seasonally adjusted annual rate of 4.47 million in July from 4.37 million in June, and are 10.4 percent above the 4.05 million-unit pace in July 2011.
Lawrence Yun, NAR chief economist, said housing affordability conditions are very good. “Mortgage interest rates have been at record lows this year while rents have been rising at faster rates. Combined, these factors are helping to unleash a pent-up demand,” he said. “However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”
Total housing inventory at the end of July increased 1.3 percent to 2.40 million existing homes available for sale, which represents a 6.4-month supply at the current sales pace, down from a 6.5-month supply in June. Listed inventory is 23.8 percent below a year ago when there was a 9.3-month supply.
Sales of new single-family houses in July 2012 were at a seasonally adjusted annual rate of 372,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.6 percent above the revised June rate of 359,000 and is 25.3 percent above the July 2011 estimate of 297,000.
The median sales price of new houses sold in July 2012 was $224,200; the average sales price was $263,200. The seasonally adjusted estimate of new houses for sale at the end of July was 142,000. This represents a supply of 4.6 months at the current sales rate.
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 746,000. This is 1.1 percent below the revised June estimate of 754,000, but is 21.5 percent above the July 2011 rate of 614,000. Single-family housing starts in July were at a rate of 502,000; this is 6.5 percent below the revised June figure of 537,000. The July rate for units in buildings with five units or more was 229,000.
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 812,000. This is 6.8 percent above the revised June rate of 760,000 and is 29.5 percent above the July 2011 estimate of 627,000.
Single-family authorizations in July were at a rate of 513,000; this is 4.5 percent (±0.8%) above the revised June figure of 491,000. Authorizations of units in buildings with five units or more were at a rate of 274,000 in July.
The Conference Board Consumer Confidence Index, which had improved in July, declined in August. The Index now stands at 60.6 (1985=100), down from 65.4 in July. The Expectations Index decreased to 70.5 from 78.4. The Present Situation Index, however, was virtually unchanged, at 45.8 versus 45.9 a month ago.
Lynn Franco, Director of Economic Indicators at The Conference Board, said: "The Consumer Confidence Index is now at its lowest level since late last year (Nov. 2011, 55.2). A more pessimistic outlook was the primary reason for this month's decline in confidence. Consumers were more apprehensive about business and employment prospects, but more optimistic about their financial prospects despite rising inflation expectations. Consumers' assessment of current conditions was virtually unchanged, suggesting no significant pickup or deterioration in the pace of growth."
Next month in this space, the September 2012 AHMA Home Improvement Industry Confidence Index will provide you with another timely indication of how your peers perceive the industry’s current situation and future prospects for growth. Please look for our online survey in your e-mail Tuesday, September 25 to participate and share with us your valuable insights. And thanks to all who have been responding to the online survey!
--TVG
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