Sales of building materials and garden equipment and supplies at retailers continued to exhibit strength in the beginning of 2021, rising at a seasonally adjusted pace of over 13% in January 2021. While sales in this segment were expected to remain robust through 2021, the scope of sales gains for the month was unexpected.
Increases in retail sales by building materials and garden equipment and supplies retailers were supported by such factors:
- continuing interest in DIY improvement projects by those who remain largely home-bound due to the COVID-19 pandemic
- positive weather conditions – such as mild temperatures and a lack of precipitation – in many parts of the US, which allowed contractors and crews to remain working on projects
- the ongoing repair work in those parts of the US that saw severe damage caused by hurricanes and other storms in the late summer and autumn of 2020
- high prices for lumber and other building materials
Regular readers of this blog are aware of the effect of these factors on not only building materials sales but also the construction market as a whole, as a wide range of projects have been affected by high material costs and shortages of materials needed to complete the construction of new homes or finish kitchen and bathroom renovations.
Freedonia experts will continue to monitor retail sales across multiple market segments to see how the US economy will fare throughout 2021. Major retailers such as Home Depot are considering what 2021 will look like, suggesting that if late-2020 levels continue, then 2021 sales (for comparable stores) could be flat to slightly positive the year from the high 2020 base.
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.