Spring's Softening Employment Picture Hurt Remodeling Outlook
The National Association of Homebuildersrn(NAHB) said today that their Remodeling Marketing Index (RMI) had slipped inrnthe second quarter, probably as a result of a softening labor market. The Index, which is similar to NAHB’s BuilderrnConfidence Index, is compiled from a survey of NAHB remodelers in which theyrnare asked to rate current activity and indicators of future activity like callsrnfor bids. The Index dropped from 47 torn45 in the second quarter. The Index hadrntwice reached 48 last year, the highest readings since 2006</p
In the second quarter, the RMI componentrnmeasuring current market conditions dropped to 46 from 49 and the componentrnmeasuring future indicators of remodeling business remained unchanged at 44. Any score below 50 indicates that morernremodelers gauge activity as lower compared to the prior quarter than report itrnhigher. <br /<br /"Remodelers have some backlog of jobs and along with higher quality leads,rnthis is making them cautiously optimistic about the near future," saidrnNAHB Remodelers Chairman George "Geep" Moore Jr. "The positive outlook is constrained byrncontinuing credit constraints and inaccurate appraisals that make customerrnfinancing difficult for big jobs like additions and whole house remodels."<br /<br /In the South, the RMI rose by one point to 47, while in the West it was flat atrn47. The Northeast and Midwest regions fell by six points and four points, downrnto 42 and 46, respectively.</p
NAHB said two important indicators ofrnfuture activity rose in the second quarter. rnThe backlog of jobs went to 46 from 43 and the amount of work committedrnfor the next three months increased to 43 from 42. All current market indicators were downrnincluding major additions and alterations to 42 (from 44), minor additions andrnalterations to 47 (from 52) and maintenance and repairs to 50 (from 51).<br /<br /NAHB Chief Economist David Crowe said the weak labor market in the spring hurtrnconsumer confidence and likely explains some of the temporary signs of weaknessrnin the construction industry during the second quarter including the two pointrndecline in the RMI. "The relativernstrength of the RMI components for jobs in the pipeline is consistent with thernmodest increase in remodeling activity NAHB is forecasting for the balance ofrn2012."
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