This article is an extract from a special new report, “The Fastmarkets Repair and Remodeling Index”. Get your copy of the free 15-page report here.
As a wholesaler, trader or retailer within the building material space one source of frustration in the wood products industry can be the lack of timely, reliable data on repair and remodeling (R&R) activity. This is especially crucial for wood products demand.
Fastmarkets estimates that in 2022 R&R activity in the US accounted for 27% of domestic structural panel demand, 33% of domestic nonstructural panel demand and 41% of domestic lumber demand.
What also complicates the picture is that most measures of R&R activity track sales in dollars. The elevated building material price inflation of recent years has made it more difficult to track underlying volumes of materials used in R&R. These circumstances ultimately motivated our expert economists and wood products team to create a new monthly metric for tracking R&R activity in the United States, which we outline extensively in a new report.
Repair and remodeling is a vital factor in the wood products market
Repair and remodeling activity is often broken down into the professional contractor (“pro”) side and the do-it-yourself (DIY) segments. The Joint Center for Housing Studies of Harvard University (JCHS) estimates that the DIY share of repair and remodeling spending in 2021 was 19.9%. However, the remaining 80.1% of professional expenditures include labor costs while the DIY share does not. When adjusting for this, the DIY share of R&R activity in 2021 when building materials consumption in R&R is probably closer to 30% and cannot be ignored.
The Fastmarkets Repair and Remodeling Index (RRI) incorporates data from both sides of the market to create an intuitive, easy-to-interpret index that captures the volume of R&R activity at a monthly frequency. For the wood products and building materials industry, this will be a powerful tool for capturing this critical, but often opaque end-use market.
What’s inside the wood products repair and remodeling report?
Inside this new report you will find:
- A review of existing repair and remodeling data: we look at the current examples of available data and observe their characteristics and limitations. The sources we review are C-30 improvements data from the US Census, The Leading Indicator of Remodeling Activity (LIRA) from the Harvard Joint Center for Housing Studies (JCHS), and the JCHS total R&R market metric.
- An outline of the methodology behind Fastmarkets’ new Repair and Remodeling Index (RRI): we detail the methods that have gone into creating the index, such as its data sources, estimation techniques and seasonal adjustment process.
- A comparison between the RRI to alternative measures: We emphasize the uniqueness of this new repair and remodeling index by comparing it side by side with the alternatives examples we have already explored. In doing so, we provide evidence for the advantages of using the RRI.
Download the new report today to discover more about the new RRI and how it could give you more comprehensive visibility of the lumber and wood panel market.
Get your copy here
