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News & Press: HIRI News

Home Improvement Market Expects Growth of 5.9% in 2016

Monday, March 6, 2017   (0 Comments)
Posted by: Matthew Craig

HIRI/IHS Markit forecast for 2016 up 5.9%, Expecting 4.3% sales growth in 2017

Total home improvement products sales are expected increase 5.9% in 2016 to $347 billion in total sales. The Professional Market is expected to increase 7.1% in 2016 over 2015 and the Consumer Market will see a sales increase of 5.5%.


Growth is expected to continue over the next few year, but at a slower pace that what was seen in 2016. Total growth is expected to be 4.3% in 2017, while 2018 looks to grow another 4.8%.  


The National Economic Outlook

  • The economy is enjoying multiple tailwinds at the outset of 2017: a sharp rebound in energy-sector capital spending, strength in the single-family housing market, a pickup in non-defense capital goods, strong momentum in employment growth (including the 227,000 increase in payroll employment in January), and signs of rising price inflation.
  • One mild headwind is the continuation of the inventory drawdown in the first half of the year.    
  • With consumer spending advancing at a decent pace and both residential and nonresidential investment showing signs of life, IHS Markit predicts that real GDP growth during the four quarters of 2017 will be in the 2.0–2.8% range.
  • Real equipment spending rebounded in the fourth quarter after declining for four straight quarters. Its recent momentum should carry over into 2017. Intellectual property products and nonresidential structures are expected to post modest gains in 2017 and 2018.
  • In 2018, there is likely to be a pickup in the pace of the recovery, as the expected fiscal stimulus kicks in. All this assumes no trade wars and no serious policy mistakes in the coming year.
  • Our current baseline incorporates estimates for a federal government hiring freeze exempting military, public safety, and public health employees.


Outlook for the Home Improvement Products Market

  • The outlook for existing home sales in 2017 is lower relative to the past couple of years. While growth in 2015 and 2016 were 6.3% and 4.0%, respectively, 0.7% growth is expected this year. The outlook for disposable income has inched down slightly at 2.6% in 2017, relative to 2.7% growth in 2016.
  • Sales of home improvement products in 2016 were close to the rate estimated in the September report. The total home improvement market grew by 5.9% to $346 billion—with growth 0.1 percentage points lower compared to our previous estimate.
  •  Consumer Market sales in nominal dollars are expected to increase by 4.2% and Professional Market sales by 4.5% in 2017. Growth of sales in constant dollars will be slightly lower in both markets.  
  • We expect growth in home improvement product sales to slow slightly over the next few years, averaging 3.8% in 2018 to 2021. While Professional Market growth is expected to be marginally stronger in 2017, Consumer Market growth will be stronger over 2018-2021.


Growth rates of market size by segment for the current year and 5-year historical and forecast periods are as follows:






Current prices:




Consumer Market




Professional Market








Constant prices:




Consumer Market




Professional Market