US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Once Promising Home Improvement Market Threatened by COVID-19 Pandemic

2020 was supposed to be a good year for the home improvement market as low unemployment, wage growth, and rising property values were set to encourage thousands of homeowners to undertake significant renovation projects – remodeling kitchens, adding bathrooms, replacing roofing or siding, or installing new flooring. Instead, the home improvement industry faces a period of decline due to the COVID-19 pandemic.

As indicated by a number of reports, home remodeling spending in the US expected to decline throughout the rest of 2020 and into the first part of 2021. While construction has been classified as an “essential” business by both the US Department of Homeland Security and by the majority of state governors across the US, the home remodeling industry will still face a number of challenges going forward that will limit sales opportunities, such as:

  • homeowners dealing with unemployment (even if temporarily) and thus unable to invest in home renovations
  • consumers more broadly concerned about their future economic well-being and thus putting off home improvement projects
  • homeowners unwilling to let people into their homes to make estimates due to concerns about spreading coronavirus
  • slowdowns in the pace of work due to social distancing on job sites and other mandates (such as those regarding cleaning equipment) that add to the time needed to complete a job
  • potential shortages of building materials as suppliers adjust operations in the face of reduced demand
  • delays in the shipment of ordered materials due to a shortage of truckers carrying materials or logjams in ports