3 Home Improvement Category Predictions: Sunny Days Ahead

  • Categories:

    Industry Trends

  • Date:

    November 23, 2021

3 Home Improvement Category Predictions: Sunny Days Ahead

Industry Trends

This post, originally published on November 23, 2021, was updated on January 19, 2022 to reflect the most current information.

Every year on February 2, the world’s most famous groundhog, Punxsutawney Phil, crawls out of his temporary home on Gobbler’s Knob to look for his shadow. More than 130 years after the tradition began in the late 19th century, Americans across the country still tune in to find out if Phil will see his shadow (suggesting six more weeks of winter) or not see it (forecasting an early spring).

So, while we look forward to Phil’s big day, let’s shine some light on another noteworthy prediction from our friends at the Home Improvement Research Institute, the nation’s leading resource for market research regarding the home improvement industry.

Recently, HIRI partnered with IHS Markit, a global leader in information and analytics, to analyze the total U.S. building products market and to provide analysis on the consumer and professional markets.

Here are three key takeaways from their findings.

1. The industry can count on a positive outlook through 2025, although with slow sales growth overall compared to 2021.

    We all know that 2020 and 2021 were volatile years for the housing and building markets due to depleted supplies and manufacturing slowdowns. But despite the pandemic (rather, largely because of it), demand and sales for home improvement increased. Forced to spend more time at home, Americans showed greater interest in investing time and money to make their homes cleaner, more comfortable and more functional, including creating space for things such as home offices and exercise.

    ​​“The home improvement industry has shown explosive growth during the time of the coronavirus pandemic and shows no signs of going back,” said HIRI Research Director Matthew Craig.

    Looking ahead, the numbers show a positive outlook through 2025, with HIRI predicting the total U.S. building products market to grow by an additional 2.9% from 2023 through 2025.

    While that growth is certainly a positive indicator, it is important to note that the massive growth in 2021 likely won’t continue at the same rate. For reference, HIRI estimates that the total building products market will have grown by 13.0% in 2021. That number is expected to be closer to 2.3% in 2022.

    2. A slowdown in DIY projects will create more business for home improvement professionals.

      The numbers show that the market in 2021 has been made up of growth in both the consumer and professional markets, at 10.8% and 18.2%, respectively. In 2022, those numbers are still expected to improve, but at significantly slower rates.

      Why the slowdown in growth? HIRI and IHS Markit believe that the downshift can be partially explained with a simple answer: Homeowners are completing recent home improvement projects and are probably not looking to start another one.

      While homeowners were willing to spend money to make their homes more comfortable and useful in 2021, they may now have achieved their goal. They’ve likely completed an in-home workspace or made renovations to their kitchens or living rooms at this point. For some, that was an inspiring and fun experience. Others will have learned that they’d prefer to hire professionals to do renovation work in the future.

      As a result, HIRI research shows that growth is expected to continue in the professional markets at a higher rate than the consumer markets, offering opportunity for contractors and professionals to regain more of the market share.

      According to IHS Markit Managing Director Scott Hazelton, “While the boom cannot last forever, a continuing strong economy suggests spending by contractors will actually improve year over year as households feel more comfortable with contractors in their home.”

      3. These are the categories and regions with the strongest potential for growth.

        HIRI’s forecast also breaks down the predicted growth by merchandise line and location.

        • The strongest anticipated performers? Siding and exterior trim, with a predicted 11.0% growth, and gypsum and specialty boards, with a predicted 9.5% growth between 2021 and 2025.

        • In addition, major household appliances, kitchen and bath cabinets, doors and moldings, roofing supplies, and dimensional lumber and boards are all projected to perform well, with each showing an estimated 8.0% growth in the same period.

        • Regionally, the West South Central and Pacific are expected to experience the largest growth between 2022 and 2025, with increases of 6.2% and 6.0%, respectively.

        • The above regions are followed by New England and the South Atlantic, with both estimated for 5.5% growth.

        While we continue to live and work in unprecedented times, forecasts such as these show that things are moving in the right direction. Like a much more scientific and accurate version of Punxsutawney Phil fearlessly telling us if we can expect an early spring, HIRI’s report shows that the future for the home improvement market looks bright and sunny.

        Interested in how Wray Ward can help your brand take advantage of these continuing growth trends in the home improvement category? Email me with questions.

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