Home Improvement Industry Confidence IndexSM

AHMA Confidence Index Declined in December

Manufacturers also expressed strong support for the Keystone XL pipeline and a preference for Romney in the Republican primary.

The American Hardware Manufacturers Association’s AHMA Home Improvement Industry Confidence Index’s Current Situation Index declined in December to 229.2 from 266.7 in November (December 2008 = 100), while the Future Expectations Index also fell to 241.1 from 262.1.

In comparing current sales levels to year-ago levels, 55 percent of respondents said sales were higher in December versus year-ago levels, down from 64 percent in November.  For December, 25 percent reported sales were even, and 20 percent said sales were below year-ago levels.

Looking forward six months, 60 percent of December respondents said they expect sales to be above current levels, down from 76 percent in November.  In December, 30 percent of respondents said they expect sales to be even in six months and 10 percent expect sales to be below current levels.

Looking forward one year, 80 percent of respondents project sales will be higher, up from 76 percent who felt that way in November.  Fifteen percent of December respondents project sales will be even one year from now and five percent project sales will be below current levels.

Other Monthly Economic Reports Point to Gradual Improvement:

Retail sales of home improvement products (NAICS 444) decreased 0.3 percent in November to $25.643 billion from $25.709 billion in October. Sales are up 6.2 percent from November 2010 levels. For the first 11 months of the year, sales are up 5.9 percent to $277.139 billion, according to data released by the Census Bureau and the Department of Commerce in the monthly Advance Retail Sales Report.

Advance estimates of all U.S. U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $399.3 billion, an increase of 0.2 percent from the previous month and 6.7 percent above November 2010. Total sales for the September through November 2011 period were up 7.4 percent from the same period a year ago. The September to October 2011 percent change was revised from +0.5 percent to +0.6 percent.

Existing-home sales increased 4.0 percent to a seasonally adjusted annual rate of 4.42 million in November from 4.25 million in October, and are 12.2 percent above the 3.94 million-unit pace in November 2010.

Lawrence Yun, NAR chief economist, said “sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing. We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”

Total housing inventory at the end of November fell 5.8 percent to 2.58 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, down from a 7.7-month supply in October.

Sales of new single-family houses in November 2011 were at a seasonally adjusted annual rate of 315,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.6 percent above the revised October rate of 310,000 and is 9.8 percent above the November 2010 estimate of 287,000.

The median sales price of new houses sold in November 2011 was $214,100; the average sales price was $242,900. The seasonally adjusted estimate of new houses for sale at the end of November was 158,000. This represents a supply of 6.0 months at the current sales rate.

Privately-owned housing starts in November were at a seasonally adjusted annual rate of 685,000 This is 9.3 percent above the revised October estimate of 627,000 and is 24.3 percent above the November 2010 rate of 551,000. Single-family housing starts in November were at a rate of 447,000; this is 2.3 percent above the revised October figure of 437,000. The November rate for units in buildings with five units or more was 230,000.

Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 681,000. This is 5.7 percent above the revised October rate of 644,000 and is 20.7 percent above the November 2010 estimate of 564,000. Single-family authorizations in November were at a rate of 435,000; this is 1.6 percent (±1.6%) above the revised October figure of 428,000. Authorizations of units in buildings with five units or more were at a rate of 224,000 in November.

The Conference Board Consumer Confidence Index, which had improved in November, increased further in December. The Index now stands at 64.5 (1985=100), up from 55.2 in November. The Present Situation Index increased to 46.7 from 38.3. The Expectations Index rose to 76.4 from 66.4.

Lynn Franco, Director of The Conference Board Consumer Research Center, said: "After two months of considerable gains, the Consumer Confidence Index is now back to levels seen last spring (April 2011, 66.0). Consumers’ assessment of current business and labor market conditions improved again. Looking ahead, consumers are more optimistic that business conditions, employment prospects, and their financial situations will continue to get better. While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes."

“Hot Topic” Questions:

The December Confidence Index survey asked two supplemental questions of AHMA members:

“Do you think the president should approve construction of the Keystone XL pipeline?” And:  “Considering the two leading candidates for the Republican presidential primary, would you prefer Romney or Gingrich?”

To the first question, on the pipeline, 90 percent responded “Yes,” 10 percent responded “Not Sure,” and zero percent responded “No.”

On the Republican primary, 60 percent responded “Romney,” 15 percent responded “Gingrich,” and 25 percent responded “Neither of the above.”

Next month in this space, the January 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, January 31 to participate and share with us your valuable insights.  And thanks to all who have been responding to the online survey!

--TVG



Currently, are your sales above, even or below levels of the same time last year?

 

NOVEMBER

DECEMBER

Above

64%

55%

Even

12%

25%

Below

24%

20%


 



Looking forward six months, do you predict your sales will be above, even or below current levels?

 

NOVEMBER

DECEMBER

Above

76%

60%

Even

16%

30%

Below

08%

10%


 




Looking forward one year, do you predict your sales will be above, even or below current levels?

 

NOVEMBER

DECEMBER

Above

76%

80%

Even

16%

15%

Below

08%

05%


 



Do you think the president should approve construction of the Keystone XL pipeline?

 

DECEMBER

Yes

90%

Not Sure

10%

No

00%


 



Considering the two leading candidates for the Republican presidential primary, would you prefer Romney or Gingrich?

 

DECEMBER

Romney

60%

Gingrich

15%

Neither of the Above

25%


 
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