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Barometers { A look at key statistics & trends shaping the industry } 8 | Kitchen & Bath Design News December 2014 G rowth in the nation's housing market con- tinued at a slow but steady pace as 2014 began winding to an end. Among the key statistics and fore- casts released in recent weeks by government agen- cies, research firms and industry-related trade asso - ciations were the following: HOUSING STARTS A continued recovery for the nation's housing market is apparently in the ofng, "as job creation grows and consumers gain more conf- dence," the chief economist for the National Association of Home Builders predicted last month. David Crowe, ch ief econom ist for t he Wa s h i n g t o n , D C - b a s e d NAHB, made his comment in the wake of a government re- port that stated, for the third time this year, nationwide housing starts surpassed the one-million mark, ris- ing to a seasonally adjusted annual rate of 1.017 million units, according to the latest numbers. "These numbers show housing starts return- ing to levels we saw earlier this summer," said NAHB Chairman Kevin Kelly. "We're hopeful this pattern of mod- est growth will continue as we close out the year." HOME REMODELING Most remodelers 'remain confdent that the market is improving as homeowners undertake renovations, large and small," according to Paul Sullivan, chairman of the Na- tional Association of Home Builders' Remodelers Coun- cil. Sullivan commented in the wake of a report that the most recent NAHB Remodel- ing Market Index reclaimed its high-water mark of 57 in the third quarter of 2014, the sixth consecutive quarter for a reading above 50. An RMI above 50 indicates that more remodelers report market ac- tivity is higher, compared to the prior quarter, than report it is lower. "The consistency and longevity of positive RMI readings are in line with the gradual recovery of the hous- ing industry that we expect to continue," Sullivan said. The most significant headwind to a stronger recovery is a shortage of qualifed labor and subcontractors in some parts of the country, making it difcult for remodelers to employ carpenters and fn- ish projects as quickly and economically as many of cus- tomers expect, the NAHB said (see related story, below). APPLIANCE SHIPMENTS D ome s t ic sh ipment s of m ajor home appl i a nce s ga i ned g rou nd aga i n i n September, with year-to- date figures through the frst nine months of 2014 running well ahead of last year's numbers, according to the Association of Home Appliance Manufacturers. The Washington, DC-based AHAM reported last month that September appliance sh ipment s tot a led some 6.6 million units, up 9.3% from the approximately 6.1 million units shipped in September, 2013. Year-to- date sh ipment s t h rough September were up 5.0% over the total for the frst nine months of 2013, AHAM stated. CABINET & VANITY SALES Sales of kitchen cabinets and vanities continued to gain ground in September, the Kitchen Cabinet Manu- facturers Association said last month. According to the Reston, VA-based KCMA, manufacturers participating in the association's monthly "Trend of Business" survey reported that September sales of cabinets and vani- ties rose 8.0% over the same month in 2013. Sales of stock cabinets increased 7.8%, while semi-custom cabinet sales gained 6.7% and cus- tom cabinet sales rose 17.5%, the KCMA said. Year-to-date sales through September were up 10.0% over the same nine-month period in 2013, the KCMA added. Growth Slow, But Steady, Throughout Housing Market Moderating Growth Seen For Residential Remodeling MARKET ANALYSIS Cambridge, MA — Refecting the slow pace of recovery in the overall housing mar- ket, the home remodeling industry is expected to con- tinue its path of moderating growth, according to the latest "Leading Indicator of Remodeling Activity" (LIRA) released last month by the Remodeling Futures Pro- gram at the Joint Center for Housing Studies of Harvard University. The LIRA, designed to es - timate homeowner spending on improvements for the cur- rent quarter and subsequent t h ree qua r ters, project s annual growth in home im- provement spending to ease to 3.1% through the second quarter of 2015. "Stronger gains in remod- eling activity are unlikely, given the recent slowdowns we've seen in housing starts, sales and house price gains," said Chris Herbert, acting managing director of the Cambridge, MA-based Joint Center. "While the contin- ued recovery in employment should ultimately keep the market on an upward trajec- tory, remodeling is likely to see slower growth rates mov- ing into 2015." "Growth in home remod- eling activity continues to hover around its longer- term average of mid-single digit gains," added Abbe Will, a research analyst in t he Remodeling Futures Program. "Even though the housing market overall has been lackluster, many ar- eas of the country remain economically healthy and remodeling contractor sen- timent remains high." BUSINESS CONDITIONS BY MAJOR CONSTRUCTION SECTOR % OF SURVEY RESONDENTS REPORTING SECTOR 'IMPROVING' MINUS % REPORTING 'WEAKENING' Business conditions at residential architecture frms began to accelerate in early 2013 and have remained at an elevated pace, according to the latest survey conducted by the American Institute of Architects. Various sectors of the market, however, have recovered unevenly. As refected in the graphic above, the major home improvement sectors, including kitchen and bath remodels, have been improving consistently since early 2009, while new-construction sectors – including the townhouse/condo market and second/ vacation homes – have been slower to recover (see related Consumer Buying Trends, Page 9). Source: American Institute of Architects 2014 2013 Additions & Alterations 70 64 Kitchen & Bath Remodeling 60 61 First-time Buyer/Affordable Home Market 17 15 Move-up Homes 33 35 Custom/Luxury Home Market 36 25 Townhouse/Condo Market 18 13 Second/Vacation Home 2 -8