Home Improvement Industry Confidence IndexSM

AHMA Confidence Index Improved in January

Manufacturers also expressed dissatisfaction with administration efforts to make American manufacturers more competitive and doubts about the “state of the union” getting stronger.

The American Hardware Manufacturers Association’s AHMA Home Improvement Industry Confidence Index’s Current Situation Index improved in January to 237.5 from 229.2 in December (January 2008 = 100), while the Future Expectations Index fell to 218.9 from 241.4.

In comparing current sales levels to year-ago levels, 57 percent of respondents said sales were higher in January versus year-ago levels, up from 55 percent in December.  For January, 26 percent reported sales were even, and 17 percent said sales were below year-ago levels.

Looking forward six months, 57 percent of January respondents said they expect sales to be above current levels, down from 60 percent in December.  In January, 30 percent of respondents said they expect sales to be even in six months and 13 percent expect sales to be below current levels.

Looking forward one year, 70 percent of respondents project sales will be higher, down from 80 percent who felt that way in December.  Seventeen percent of January respondents project sales will be even one year from now and 13 percent project sales will be below current levels.

Other Monthly Economic Reports Point to Gradual Improvement:

Retail sales of home improvement products (NAICS 444) increased 1.6 percent in December to $25.879 billion from $25.476 billion in November. Sales were up 5.8 percent from December 2010 levels. For the year, sales were up 5.7 percent to $300.182 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 December, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $406 billion, an increase of 0.1 percent from the previous month and 6.5 percent above December 2010. Total sales for the 12 months of 2011 period were up 7.7 percent from 2010. The October to November 2011 percent change was revised from +0.2 percent to +0.4 percent.

Existing-home sales rose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010.

Lawrence Yun, NAR chief economist, these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

Total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply2 at the current sales pace, down from a 7.2-month supply in November.

Sales of new single-family houses December 2011 were at a seasonally adjusted annual rate of 307,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.2 percent (±13.2%) below the revised November rate of 314,000 and is 7.3 percent (±16.6%) below the December 2010 estimate of 331,000.

The median sales price of new houses sold in December 2011 was $210,300; the average sales price was $266,000.

The seasonally adjusted estimate of new houses for sale at the end of December was 157,000. This represents a supply of 6.1 months at the current sales rate.

Privately-owned housing starts December were at a seasonally adjusted annual rate of 657,000. This is 4.1 percent (±11.6%) below the revised November estimate of 685,000, but is 24.9 percent (±18.3%) above the December 2010 rate of 526,000. Single-family housing starts in December were at a rate of 470,000; this is 4.4 percent (±11.3%) above the revised November figure of 450,000. The December rate for units in buildings with five units or more was 164,000. An estimated 606,900 housing units were started in 2011. This is 3.4 percent (±2.4%) above the 2010 figure of 586,900.

Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 679,000. This is 0.1 percent (±1.2%) below the revised November rate of 680,000, but is 7.8 percent (±2.2%) above the December 2010 estimate of 630,000. Single-family authorizations in December were at a rate of 444,000; this is 1.8 percent (±1.2%) above the revised November figure of 436,000. Authorizations of units in buildings with five units or more were at a rate of 209,000 in December. An estimated 611,900 housing units were authorized by building permits in 2011. This is 1.2 percent (±1.3%)* above the 2010 figure of 604,600.

The Conference Board Consumer Confidence Index, which had increased in December, retreated in January. The Index now stands at 61.1 (1985=100), down from 64.8 in December. The Present Situation Index declined to 38.4 from 46.5. The Expectations Index edged down to 76.2 from 77.0 in December.

Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumer Confidence retreated in January, after large back-to-back gains in the final two months of 2011. Consumers' assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels. Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects. Recent increases in gasoline prices may have consumers feeling a little less confident this month."

“Hot Topic” Questions:

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

“In his recent State of the Union address, President Obama spoke of the need to ‘revive manufacturing’ in America.  Do you believe the administration is doing all that it could to help make American manufacturers more competitive in the world marketplace?” and “Also in the State of the Union address, President Obama said the economy is growing and the ‘state of our union is getting stronger.’ Do you agree with this statement?”

To the first question, on competition in the world marketplace, 100 percent responded “No,” zero percent responded “Not Sure,” and zero percent responded “Yes.”

On the state of the union getting stronger, 25 percent responded “Yes,” 21 percent responded “Not Sure,” and 54 percent responded “No.”

Next month in this space, the February 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, February 28 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?

 

DECEMBER

JANUARY

Above

55%

57%

Even

25%

26%

Below

20%

17%


 



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

 

DECEMBER

JANUARY

Above

60%

57%

Even

30%

30%

Below

10%

13%


 




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

 

DECEMBER

JANUARY

Above

80%

70%

Even

15%

17%

Below

05%

13%


 



In his recent State of the Union address, President Obama spoke of the need to “revive manufacturing” in America. Do you believe the administration is doing all that it could to help make American manufacturers more competitive in the world marketplace?

 

JANUARY

Yes

00%

Not Sure

00%

No

100%


 



Also in the State of the Union address, President Obama said the economy is growing and the “state of our union is getting stronger.” Do you agree with this statement?

 

JANUARY

Romney

25%

Gingrich

21%

Neither of the Above

54%


 
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