HIRI research finds good news for market growth

No one is calling it breakout growth, but the housing market is picking up, and along with it comes spending on home improvement.



That’s one of the broad strokes from the latest “Size of Market” study from the Home Improvement Research Institute. The study, executed by IHS Economics, estimated the total home improvement product universe up 4.5% for the year. The major home center chains were running higher than that figure, but the other channels of distribution lagged — paint and wallpaper stores, lawn and garden, equipment and supply stores, and appliance stores, among them.



Meanwhile, after an anemic 1% growth in the final quarter of 2015, the economists behind the “Size of Market” study expect the economy to “get back on track” in the first half of 2016 (notwithstanding the stock market, which will do what it will do). Expectations for real GDP are in for 3.0% growth in the second quarter. The story there is solid gains in sales to domestic purchasers and weak export demand, combined with a slowdown in investment in inventories.



What’s this mean for the size of the home improvement market? Mostly positive — the pace of growth of home improvement products sales is expected to increase 4.7% in 2016, reaching $333.5 billion.



Of course, it all depends on the category. The “Size of Market” study looked at 21 “Merchandise lines:” The constant-dollar growth rate from 2011 to 2015 ranged from -1.5% (insulation and weatherization products) to 6.3% (nursery stock and soil treatments). The industry is projected to perform better overall in 2015. And beyond 2016, the “Size of Market” study calls for slower but steadier performance — not a single category slower than 2.3% (nursery stock and soil treatments).



The charts on this page show the five categories with the highest expected growth rates (in constant dollars) for 2016, and also the highest average annual growth rate for the period 2017 to 2020.



The HIRI “Size of Market” study is a highly respected estimate and five-year forecast of the consumer and professional segments of the U.S. home improvement market. U.S. size-of-market estimates are updated twice per year, augmented with two interim updates on key market drivers and include history back to 1992. Historical data and forecasts are provided for the nine Census divisions, and the consumer market is broken down into 21 different product categories.



For more information, visit HIRI.org.