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US remodelling recovery underway and picking up steam

All signs point to a strong rebound for home improvement activity in 2013, according to the Leading Indicator of Remodeling Activity (LIRA) released yesterday by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.

Robust spending in the second half of 2012 suggests the remodelling recovery is already underway, and the LIRA projects that annual homeowner improvement spending will see accelerating double-digit growth through the third quarter of 2013. This news comes just ahead of the release of the Joint Center's biennial remodeling report, The U.S. Housing Stock: Ready for Renewal, scheduled for release next Wednesday, January 23rd.

"It's encouraging to see the residential sector finally contribute to growth in our economy," says Eric S. Belsky, managing director of the Joint Center. "Through the first three quarters of 2012, investment in the residential sector was responsible for one out of every six dollars added to our GDP. Moving forward, home improvement spending is expected to make an even larger contribution to GDP growth."

"There are many external economic and political risks that could derail this recovery," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. "However, the solid momentum behind home building activity, existing home sales, low financing costs and remodelling contractor sentiment, all point to a solid start to the new year for home improvement spending.

LIRA is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The indicator, measured as an annual rate-of-change of its components, provides a short-term outlook of homeowner remodeling activity and is intended to help identify future turning points in the business cycle of the home improvement industry. The next LIRA release date is April 18, 2013.

T: (617) 495-7640
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W: www.jchs.harvard.edu

18th January 2013