Data from the recently released market update points to a return to pre-pandemic market levels as inflation rises and households complete home improvement projects
INDIANAPOLIS, April 28, 2022 /PRNewswire/ — the Home Improvement Research Institute, the leading national resource for market research for the home and building products industry, forecast that consumer spending on home improvement products will level off after two years of extreme demand following the coronavirus pandemic. COVID-19. Rising inflation, reduced real household income and completed projects have led HIRI to forecast that overall consumer market sales will increase by 2.8% in 2023 to reach $382.5 billion. This research was conducted in partnership with IHS Markit and released to HIRI members at the end of Q1 in the Semi-Annual Home Improvement Products Market Forecast.
Looking at growth over the past 10 years, the 2.8% increase reflects a healthy market. In 2020 and 2021 alone, consumer spending on home improvements soared 15% and 13.3%, respectively, as homeowners invested time and money in their spaces that served as homes. , offices, schools, gyms and more.
“The extreme increase in demand for home improvement products that we have witnessed due to the pandemic was bound to subside sooner or later,” said HIRI’s research director. Matthew Craig. “While consumer spending is down slightly on home improvement products, it’s important to point out that any future momentum is compounded by unprecedented growth. The market is still doing very well.”
HIRI cites different economic circumstances and homeowner needs as reasons for changing consumer demand. This year, households are seeing their real income fall as inflation climbs and stimulus payments decline. The forecast predicts that real US disposable income will decline 3.5% in 2022 after increasing 2.2% in 2021.
For those not affected, available funds should be directed to hobbies or other major purchases, as multiple reports point to pandemic-era projects nearing completion. However, contractor-led projects are expected to see an uptick as homeowners become comfortable allowing professional help into their living spaces again.
In the short term, the total building products market is forecast to grow by 4.2% in 2022, with the consumer market growing by 2.6% and the professional market by 7.9%. Between 2024 and 2026, the consumer market should experience average growth of around 3.2% and the professional market average growth of around 4.8% for the same period. This projection highlights a significant increase in contractor activity as well as continued general interest in home improvement in the years to come.
The forecast further breaks down this growth by segmented merchandise line.
Highest Growth Merchandise Lines for Consumers
Compound annual growth rate of the consumer market between 2022 and 2026:
- Lawn and garden equipment and supplies: 6.0%
- Lumber and dimensional boards: 5.1%
- Doors and moldings: 5.0%
- Electrical supplies: 4.8%
- Nursery and soil treatments: 4.8%
- Plywood and related products: 4.6%
- Siding and exterior woodwork: 4.2%
Growing merchandise lines for professionals
Average annual growth rate of the professional market between 2022 and 2026:
- Lumber and dimensional boards: 7.6%
- Doors and moldings: 7.5%
- Plywood and related products: 7.2%
- Siding and exterior woodwork: 6.4%
- Electrical supplies: 6.3%
- Lawn and garden equipment and supplies: 6.0%
- Sundries of paint and other supplies: 5.8%
Since 1992, Home Improvement Products Market Forecast has provided the home improvement industry’s only product-focused market study with five-year forecasts for consumer markets and professionals. Product category level detail is provided for the consumer market and, since 2018, for the professional market. Geographic details are also provided for the nine census divisions with annual state level estimates. The forecast is released in spring (Q2) and fall (Q3) exclusively for HIRI members.
HIRI members enjoy unlimited access to home improvement products market forecasts and $1 million additional industry research value. For industry professionals, publishers, marketers and more, HIRI is the primary source of data to help guide business decisions.
Learn more and become a member at hiri.org.
About the Home Improvement Research Institute
HIRI is the leading non-profit trade organization for over 100 of the biggest names in the home improvement industry. Our goal has always been to provide businesses of all sizes with actionable resources ranging from raw data to digestible executive summaries to shape business decisions. Sign up as a member for unlimited access to $1 million industry research value. For more information, visit www.hiri.org.
SOURCE Home Improvement Research Institute (HIRI)