The Home Improvement Market: Three Year Forecast
Will the more people be buying home improvement products in the next few years? Find out what HIRI predicts.
Brought to you by the Home Improvement Research Institute
HIRI/IHS Market forecast expects 6.3% growth in home improvement products market in 2018 after a strong 7.3% in 2017.
Total home improvement product sales are expected to increase by 6.3% in 2018 to $398 billion. The Professional Market is expected to increase 9.9% in 2018 over 2017 and the Consumer Market will see a sales increase of 4.7%.
Growth is expected to slow slightly over the next three years, with an average growth rate of 4.2% for 2019-2022.
The National Economic Outlook
- Aided by fiscal stimulus and supportive financial conditions, real GDP growth is projected to increase 2.9%in 2018 and 2.7% in 2019.
- Consumer spending, supported by rising employment, incomes and asset values along with lower personal tax rates, will rise to 2.5% in 2018.
- Business fixed investment will benefit from expanding global markets, an easing of regulatory policies, and a more competitive tax environment.
- The Federal Reserve is expected to raise the federal funds rate to a high of 3.50% in 2020, temporarily overshooting its long-run equilibrium of 2.75%.
- Tariffs now in place will have a slight adverse impact on overall economic growth. Actions under review but not in the forecast—including 25% tariffs on auto imports and $200 billion of Chinese goods—this impact could be damaging.
Outlook for the Home Improvement Products Market
- The home improvement products market continues to outperform many other sectors of the economy, and rising prices are boosting the sales value of certain building materials. We have revised our forecast for 2018 sales upward compared with our March report, with total sales in nominal dollars now projected to increase by 6.3% to $398 billion. Consumer Market sales are expected to increase by 4.7% in 2018 and Professional Market sales by a strong 9.9%.
- The effects of stronger real income gains in the macroeconomic forecast for 2018 will be offset somewhat by a further slowing of the growth of existing home sales, and we project growth of home improvement product sales in 2019 to be slightly slower compared to 2018.
- We expect the growth of home improvement product sales to slow slightly over the following three years, with growth averaging 3.7% in 2020 to 2022.
Growth rates of market size by segment for the current year and 5-year historical and forecast periods are as follows: