In spite of declines in the home improvement industry for the second year in a row, future prospects remain optimistic.
According to numbers presented by the Home Improvement Research Institute, the U.S. home improvement products market made $290.5 billion dollars in 2008, which was down from $ 304.3 billion in 2007. In 2009, the industry dropped again to $272 billion. However, it is projected that as various economic stimulus plans gain momentum, and people build cash flow, this number will increase to $290.8 billion in 2010, $321.2 billion in 2011 and continue increasing to 2013. The projected 12% increase for 2011 will be the first double digit increase since 2004.
The overall increase in the renovation industry has become more prominent in today's ailing real estate market. Not only are more consumers primping their homes for sale, but many who were unable to obtain their asking price, have removed their houses from the market and are looking to renovating as an intermediary solution, until things pick up. The downturn in the economy, loss of jobs and layoffs are also forcing homeowners to take on jobs they would otherwise pay a tradesperson to do.
According to Will Parsons, editor of DIY Week, "The trend is for grow your own, cook your own and paint your own."
One sure fire indicator of escalating do-it-yourselfer's is by observing the tool rental industry. Homeowners trying to cut costs will rent a huge variety of equipment instead of paying a professional to do the job. In fact, a number of rental companies have reported increases in business this year. Cincy Tool Rental Inc., a small Cincinnati chain claims tool rentals are up 6% in 2009. Sunbelt Rentals who operate within Lowe's Co. stores, experienced a 47% increase this spring in online tool reservations.
Home Depot's tool rental division noticed a definite trend in yard rental equipment such as aerators, seeding and dethatching tools. Homeowners are also starting to tackle small excavating jobs and renting their own Bobcat's instead of paying the hefty $85/hour fees. The company also noticed an increase in the purchase of high end tools such as snowthrowers (45% increase this winter), and large tillers and tractors.
Gasoline powered log splitters are up 5% to 10% in 2009 as homeowners try to save costs on wood. Currently a cord of wood can be anywhere from $200 to $300 depending on the area and the demand. Accordingly, an 81% increase in wood stoves and fireplace inserts was reported by the Hearth Patio & Barbecue Association. Logsplitter.com noticed a 35% increase in sales, and Termberwolf Manufacturing Corp. has sold 11% more log splitters than last year. Home Depot noticed earnings from log splitter rentals rose 22% in the first quarter 2009 compared to the same time last year.
"If you are a person faced with a possible layoff, you aren't going to buy a boat, but you might buy a log splitter," says David Therrien, Timberwolf's chief executive.
Easter weekend is comparable to Christmas in the home renovation industry. If the weather is good, the public will be out in droves, and stores could realize up to 40 percent of their annual sales from Easter weekend to the end of May.
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