More Articles on Market Trends

Market Trends

Home Improvement Season Underway

Interior decorating tops the list of projects U.S. consumers are planning for this year.

Now that fair weather has settled in across the country, many Americans are beginning to think about sprucing up their homes, both inside and out. In fact, 36 percent of households are planning some kind of improvement or redecorating project in 1999, according to the American Express Retail Index. To see their plans become a reality, consumers will spend an average of $2,747 on everything from landscaping to room expansion. The American Express Retail Index shows that 62 percent of households that plan projects were planning to begin them between March and June. Fixer-uppers have a variety of plans this year including: • interior decorating (41 percent) • renovation/remodeling (32 percent) • landscaping (23 percent) • exterior decorating (22 percent) Most households (67 percent) will do the extra work on their own. To pay for these projects consumers will use savings (69 percent), a tax refund (23 percent) and credit and/or charge cards (17 percent; up five percent from 1998), among other means. "We have seen for four years running that consumers come out in force and spend heavily on improving their homes," said Brad Thompson, vice president, Retail Industries, American Express Co. Thompson adds, "The economy, as well as the home improvement market, continues to be strong, giving households the confidence in their spending power to complete the projects they start." A $112.2 billion industry in 1998, the home improvement category is expected to reach $136.7 billion by the year 2003, according to the Home Improvement Research Institute. The American Express survey mirrors this projection by having shown level or year-over-year growth in the number of consumers planning home improvement projects since 1996. Catching the Improvement Bug Consumers cite a variety of reasons for making changes in both the interior and exterior of their homes with the top reason, noted by 47 percent of households, being "changes in personal taste." Other major factors in their decisions include mandatory maintenance (30 percent), increase resale value (11 percent), need more space (six percent) and emergency repairs (four percent). Consumers get ideas for home improvement and redecorating projects from a variety of sources. The most popular places include magazines/newspapers (38 percent), neighbors/family (24 percent), their own concepts (23 percent), television home improvement/ design shows (22 percent) and retailer displays/showrooms (16 percent), among others. America's Dream Home Although consumers plan to spend an average of close to $3,000 to spruce up their homes in 1999, many would make some significant changes to their homes if money were no object. As ranked by consumers, the five top choices would be: • a room addition • the full remodeling of a room • to sell and buy a new home • complete remodeling of the home • landscaping Most consumers (51 percent) would leave the work to a contractor if cost were of no concern, however, one-third (34 percent) still would complete plans on their own. When it comes to additions, consumers would add a family room (24 percent), a bathroom (17 percent), a master bedroom (15 percent), a kitchen (12 percent) or any other bedroom (12 percent). Also, if they could remodel any room, 42 percent of households would start over in their kitchens, followed by the bathroom (25 percent), master bedroom (15 percent), living room (15 percent) and any other bedroom (9 percent). Shopping for Home Improvement Needs With so many different types of projects planned each year, a variety of retailers are sought by consumers who need everything from hand tools to lighting fixtures to window treatments. Like last year, the majority of households (62 percent) will shop at a home improvement store to find the products they need. Other popular retailers among consumers are department stores (17 percent), hardware stores (15 percent), home furnishings/decorating stores (14 percent) and lumber yards (nine percent). Currently in its fourth year, the American Express Retail Index on home improvement trends is compiled from a national, random survey of more than 800 consumers. The American Express Retail Index is provided by American Express, Travel Related Services Co., Inc., New York, NY, 10285-4805.