The AHMA Home Improvement Industry Confidence Index in October found the “current situation” index holding steady at 45.8 while the forward-looking future expectations index climbed to 201.7, an all-time high.

In comparing current sales levels to year-ago levels, 11 percent of respondents said sales were higher in October versus year-ago levels, matching the September percentage. For October, 15 percent reported sales were even, and 75 percent said sales were below year-ago levels, up from 72 percent in September.

Looking forward six months, 48 percent of October respondents said they expect sales to be above current levels, up from 44 percent in September. In October, 41 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, 69 percent of respondents project sales will be higher, up from 67 percent who felt that way in September. Twenty-seven percent of October respondents project sales will be even one year from now and just four percent project sales will be below current levels.

Broader Economic Reports Also Indicate Cautious Hope

Total sales of home improvement products through retail outlets in the country fell 0.2 percent in September to $23.342 billion from $23.399 billion in August, according to the latest Advance Retail Sales Report from the Department of Commerce. But September sales were still down 13 percent from September year-ago levels and are down 12.2 percent for the first nine months of 2009 compared to the same period in 2008. Overall retail sales in the country, for all retail and food service categories, declined 1.5 percent in September from August, mostly attributable to the end of the “cash for clunkers” program in the auto industry.

Gross Domestic Product (GDP) increased at an annual rate of 3.5 percent in the third quarter of 2009 (that is, from the second quarter to the third quarter), according to the "advance" estimate released by the Bureau of Economic Analysis in late October. In the second quarter, real GDP decreased 0.7 percent. On November 2, the Institute for Supply Management issued its October Manufacturing ISM Report on Business placing the current PMI at 55.7, up from 52.6 in September.

On the housing front, reports were mixed last month with existing-home sales up 9.4 percent, new home sales down four percent and housing starts up to a seasonally adjusted annual rate of 590,000, 0.5 percent above the revised August estimate of 587,000, but 28.2 percent below the September 2008 rate of 822,000.

Manufacturers Generally in Favor of Extending or Expanding the Home Buyer Tax Credit and Mostly Unsure About Ron Bloom’s Appointment as Manufacturing Czar

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

“The $8,000 first-time home buyer tax credit will expire at the end of November. Many housing industry-related interest groups are urging Congress to extend and expand the credit. Are you in favor of an extension and expansion of the program?” and “President Obama has named Ron Bloom as his senior counselor for manufacturing policy. Are you in favor of this appointment?”

To the first question, on the home buyer tax credit, 45 percent responded “In favor,” 20 percent responded “Not sure,” and 35% percent responded “Opposed.”

On the Ron Bloom question, seven percent responded “In favor,” 61 percent responded “Not sure,” and 31 percent responded “Opposed.”

Next month in this space, the November 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, December 1 to participate and share with us your valuable insights. And thanks to all who have been responding to the online survey!