Subscribe   |   Print Page   |   Sign In
News & Press: HIRI News

Expected 5.3% growth in home improvement products market in 2018

Friday, March 9, 2018   (0 Comments)
Posted by: Matthew Craig

HIRI/IHS Markit forecast expects 5.3% growth in home improvement products market in 2018 after a strong 5.6% in 2017.

Total home improvement products sales are expected increase 5.3% in 2018 to $387 billion in total sales. The Professional Market is expected to increase 4.4% in 2018 over 2017 and the Consumer Market will see a sales increase of 5.7%.


The National Economic Outlook


  • Real GDP growth is projected to increase by 2.4% in the first quarter of this year, followed by 2.9% in the second quarter. Disruptions from heavy snowfall in January will be a mild restraint on first-quarter growth.
  • The housing market ended 2017 on a solid note, after stalling in the first half, with housing starts and new and existing home sales posting impressive gains in the fourth quarter.
  • Housing starts will be on an upward trajectory across the remainder of 2018 as builders respond to rising demand, lean inventories, and rising prices.
  • The personal saving rate fell to 2.6% in the fourth quarter—its lowest quarterly level since the summer of 2005. A few possible explanations are prepayment of income taxes ahead of 2018 limits on deductibility of state and local taxes, post-hurricane replacement demand, the boost to spending from soaring asset prices, and an anticipation of tax cuts on disposable income gains.
  • We expect that stronger economic growth and higher inflation will push the Federal Reserve to raise interest rates four times this year. This would put the upper end of the target range for the federal funds rate at 2.5% by year-end—up 100 basis points from its current setting.



Outlook for the Home Improvement Products Market

  • The outlook for existing home sales growth in 2018 is lower relative to the past couple of years. While growth in 2015 and 2016 were 6.3% and 4.0%, respectively, 1.7% growth is expected this year. However, existing home sales are already at high levels. The outlook for disposable income has ticked up slightly to 3.1% in 2018, relative to 1.2% growth in 2017.
  • Sales of home improvement products in 2017 ended a bit higher than anticipated in the September report. The total home improvement market grew by 5.6% to $367 billion—with growth 0.7 percentage points higher compared to our previous estimate.
  • Consumer Market sales in nominal dollars are expected to increase by 5.7% and Professional Market sales by 4.4% in 2018. 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 3.6% in 2019 through 2022. Consumer Market growth is expected to be stronger in 2018 and throughout the forecast horizon, with the exception of 2022 where Professional Market is projected to exceed Consumer Market growth by 1.0 percentage point.



Growth rates of market size by segment for a 5-year historical period, the current year, and the remaining four years of the forecast period are as follows:






Current prices:




Consumer Market




Professional Market








Constant prices:




Consumer Market




Professional Market