More than half of the rise in sales that building product dealers can expect to get from home improvement pros this year and next will come because of hikes in material prices, the man who oversees such forecasts for the Home Improvement Research Institute ( HIRI) told the group today during the institute's annual spring conference in Orlando, Fla .
James Gillula of IHS Global Insight said that he expects sales to the professional market of home improvement products will rise 5% this year and another 6.2% in 2014. But he cautioned that after adjusting for inflation, those increases will be just 3.9% and 3.2%, respectively. Higher material prices — particularly for dimensional lumber and plywood/OSB — account for the rest of the gain, he said.
Gillula said that he expects inflation-adjusted consumer spending levels to grow about 2% this year and around 2.5% in both 2014 and 2015, in part because of the recovering housing market. But he added that the slowdown in federal spending over the past three years because of budget battles and the sequester have taken as much as a 0.6 percentage point off growth in the gross domestic product.
"While we like to think the housing market can be a savior, it's fighting an uphill battle" against the reduction in government outlays, he said. —Craig Webb is editor-in-chief of REMODELING.