| WASHINGTON -- The National Association of Home Builders’ Remodeling Market Index declined in the second quarter of 2004 to 53.5, from a first quarter 2004 reading of 59.0. NAHB shrugged off the dip, saying the second quarter results fall in line with the pace set a year ago, edging down slightly from the exceptional movement at the beginning of the year.
“Despite the dip from last quarter, many remodelers are still busy and backlogged,” said NAHB Remodelors Council Chairman Douglas Sutton, Sr., CGR, CAPS, a remodeler in Springfield, Ill. “A year-to-year comparison shows we are set to match last year’s very strong activity - we don’t expect anything less.”
In a year-to-year comparison—the most accurate indicator as the RMI is not seasonally adjusted—both indexes showed activity in line with the second quarter in 2003. The current market conditions index stands at 53.5, compared to 2003’s 53.6. The future expectations index moved one point, from 54.8 in 2003 to 55.8 this year. The Northeastern, Southern and Western parts of the country all posted modest gains from 2003, with the Northeast posting the highest growth in both current and future expectations rising from 52.1 to 58.3 and 55.6 to 61.4 respectively. The Midwest was the only region to show a minor slowdown, falling from 54.6 to 52.1 in current activity and 55.5 to 50.1 in future expectations.
“With the ongoing favorable interest rates and steady activity in all regions across the board, we expect the market to stay strong,” said NAHB Chief Economist David Seiders. “The RMI is still above 50 which signals that the market remains healthy. And despite a drop from the first quarter, the industry continues posting higher activity than in previous years.”
For the first time, the RMI “special questions” section surveyed participants about where remodeling companies spend the majority of their total revenue.
Remodelers responding to the survey reported that for maintenance and repair work about one third of their revenue goes to direct labor (labor hired by the company), one fourth goes to materials purchased by company and 15 percent goes to subcontractors which includes labor and material. Of the remaining one fourth, about 6 percent of the revenue goes to sales and marketing and other costs, and 19 percent is overhead and profit. For addition and alterations about one fourth of the revenue goes to labor, 28 percent material and 24 percent to subcontractors. Of the remaining 26 percent, 5 percent of the additions and alterations is in sales and marketing and other costs and 21 percent is in overhead and profit.
To view the latest RMI, visit http://www.nahb.org/page.aspx/category/sectionID=136
This eUpdate posting by: Steve@BuildingOnline.com
|
V 1.0
