Even as massive storms hampered consumer spending overall in February, the publication of the February retail sales report by the US Department of Commerce showed generally positive signs for building material and garden equipment and supplies dealers. As with most categories, sales declined in February after a strong showing in January; however, they were still more than 13% higher in 2021 than they were in February 2020 (the last pre-pandemic month of 2020 to compare to).
Retail sales in this segment often retreat in February, and 2021 was no different. This contraction in sales was due a number of factors:
- Consumers opted to spend less in February to pay down bills incurred by holiday shopping.
- Winter weather conditions often inhibit building construction and gardening activity, especially in the northern half of the US, but this year also hit Texas and other southern states. Weather not only slowed sales, but derailed many supply chains as well.
- Many consumers delay making “big ticket” purchases until after they have received their tax refunds – most of which do not arrive in February. In fact, 2021 refunds – even for those who filed early – are running behind as COVID stimulus checks are being processed by the same government departments.
Still, overall sales by dealers of building materials and garden equipment were supported by factors such as:
- continuing high prices for key building materials, such as lumber, copper wiring, and plastic pipe
- efforts by contractors and other construction industry participants to “stock up” on key supplies in anticipation of future price hikes due to supply shortages
- multiple outbreaks of severe winter weather across the US, which boosted sales of products such as snow blowers, shovels, and rock salt
Going forward, retail sales for building material and garden equipment and supplies dealers are expected to rise again in March and April. Not only do these months traditionally indicate the start of the outdoor season in much of the country, tax return checks and additional stimulus checks will likely spur additional spending. Despite the boom in spending on outdoor home improvements in 2020, fresh insights from The Freedonia Group National Online Survey (conducted February to March 2021) indicate that many households still have plans to make improvements to their yards and outdoor spaces in 2021.
For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products and Consumer Goods areas. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.