The lumber and building materials category showed the largest percentage increase in spending last year, up almost 19% from 2003. HIRI estimated that hurricane repairs to residential structures will amount to $2.5 billion in product spending for 2004 and $1.5 billion in 2005.
HIRI forecasted an average annual growth rate of about 4% for home improvement product sales through 2009. HIRI's predictions for 2005 include 3.4% growth in product purchases by consumers and 3.8% growth in product sales to remodeling professionals, for a total of $280.9 billion.
Sales of new and existing homes are a key driver of home improvement spending. HIRI said it expected some cooling in the housing market, but not collapse. Baby boomers are in the peak earning years and their children are entering the prime home buying years, according to Fred Miller, HIRI's managing director. Also, immigration continues to drive demand for housing, he said.