October Retail Sales Report Shows Continued Gains for Building Materials Retailers

Last week’s release of the October retail sales report showed yet another month of growth for building material and garden equipment suppliers, with monthly sales up 3.6% from September to $39.4 billion. These gains can be attributed to a number of sources, key among them:

• continuing homeowner interest in DIY home improvement projects, such as installing flooring, creating home offices or gyms, or deck building
• increases in single-family housing starts, spurring the sale of lumber, prefabricated building components, and millwork and other materials used to finish a home
• a surge in sales of plywood and emergency repair products in those parts of the US affected by severe weather, especially areas in the path of Hurricane Zeta

Compared to last year, retail sales by building material distributors and garden equipment and suppliers are more than 13% higher; however, there are concerns that this sales growth might decline through the rest of year. Retailers must be wary of:

• an expected slowdown in building construction activity – especially in the northern half of the US – as inclement weather becomes more frequent, limiting opportunities for outdoor construction work
• homeowners reducing spending on outdoor landscaping products and garden supplies as the weather turns
• climbing infection rates of COVID-19, which may cause state and local governments to limit or shut down retail activity

Even with the prospect of a slowdown – or even a decline – in sales in November, building materials retailers are poised for an outstanding year of sales growth, despites the challenges posed by the coronavirus pandemic.

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. 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.