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AHMA Confidence Index Declines in September
Manufacturers also expect an election effect and report on social media use.
The American Hardware Manufacturers Association’s AHMA Home Improvement Industry Confidence Index’s Current Situation Index declined in September to 250 from 279.2 in August (October 2008 = 100), while the Future Expectations Index also fell to 189.7 from 212.1.
In comparing current sales levels to year-ago levels, 60 percent of respondents said sales were higher in September versus year-ago levels, down from 67 percent in August. For September, 25 percent reported sales were even, and 15 percent said sales were below year-ago levels.
Looking forward six months, 55 percent of September respondents said they expect sales to be above current levels, down from 56 percent in August. In September, 25 percent of respondents said they expect sales to be even in six months and 20 percent expect sales to be below current levels.
Looking forward one year, 55 percent of respondents project sales will be higher, down from 67 percent who felt that way in August. Thirty-five percent of September respondents project sales will be even one year from now and 10 percent project sales will be below current levels.
“Hot Topic” Questions
The September Confidence Index survey asked two supplemental questions of AHMA members:
“Will the outcome of the upcoming presidential election have a significant effect on your business strategy and planning?” and “Does your company use social media, such as Facebook and Twitter, as part of your marketing plan?”
To the first question, on the election, 70 percent responded “Yes,” 15 percent responded “Not Sure,” and 15 percent responded “No.”
On the use of social media, 45 percent responded “Yes,” 10 percent responded “Not Sure,” and 45 percent responded “No.”
Other Monthly Economic Reports:
Retail sales of home improvement products (NAICS 444) rose one percent in August to $24.013 billion from $23.779 billion in July, according to the most recent Census Bureau report. Sales were up 1.4 percent from August 2011 levels. For the first eight months of the year total sales are up 6.4 percent to $198.252 billion.
Estimates for all retail sales in August, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $406.7 billion, an increase of 0.9 percent from the previous month and 4.7 percent above August 2011. Total sales for the June through August 2012 period were up 4.0 percent from the same period a year ago. The June to July 2012 percent change was revised from 0.8 percent to 0.6 percent.
Existing-home sales rose 7.8 percent to a seasonally adjusted annual rate of 4.82 million in August from 4.47 million in July, and are 9.3 percent higher than the 4.41 million-unit level in August 2011.
Lawrence Yun, NAR chief economist, said favorable buying conditions get the credit. "The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions," he said. "Inventories in many parts of the country are broadly balanced, favoring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices."
Total housing inventory at the end of August rose 2.9 percent to 2.47 million existing homes available for sale, which represents a 6.1-month supply 4 at the current sales pace, down from a 6.4-month supply in July. Listed inventory is 18.2 percent below a year ago when there was an 8.2-month supply.
Sales of new single-family houses in August 2012 were at a seasonally adjusted annual rate of 373,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.3 percent below the revised July rate of 374,000, but is 27.7 percent above the August 2011 estimate of 292,000.
The seasonally adjusted estimate of new houses for sale at the end of August was 141,000. This represents a supply of 4.5 months at the current sales rate.
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 750,000. This is 2.3 percent above the revised July estimate of 733,000 and is 29.1 percent above the August 2011 rate of 581,000. Single-family housing starts in August were at a rate of 535,000; this is 5.5 percent above the revised July figure of 507,000. The August rate for units in buildings with five units or more was 208,000.
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 803,000. This is 1.0 percent below the revised July rate of 811,000, but is 24.5 percent above the August 2011 estimate of 645,000.
Single-family authorizations in August were at a rate of 512,000; this is 0.2 percent above the revised July figure of 511,000. Authorizations of units in buildings with five units or more were at a rate of 263,000 in August.
The Conference Board Consumer Confidence Index, which had declined in August, improved in September. The Index now stands at 70.3 (1985=100), up from 61.3 in August. The Expectations Index increased to 83.7 from 71.1. The Present Situation Index rose to 50.2 from 46.5 last month.
Lynn Franco, Director of Economic Indicators at The Conference Board, said: “The Consumer Confidence Index rebounded in September and is back to levels seen earlier this year (71.6 in February 2012). Consumers were more positive in their assessment of current conditions, in particular the job market, and considerably more optimistic about the short-term outlook for business conditions, employment and their financial situation. Despite continuing economic uncertainty, consumers are slightly more optimistic than they have been in several months.”
Next month in this space, the October 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, October 30 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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