A variety of “special questions” are also asked at the end of the survey to help pinpoint market trends.
Both indexes remained virtually unchanged in this year’s third quarter after registering substantial gains in the previous three months. The index gauging current market conditions slipped one-tenth of one point to 53.5, while the index gauging future expectations rose by the same margin to 54.9. However, year-over-year comparisons — which are more appropriate because the RMI is not seasonally adjusted — show substantial gains of 3.7 points for current market conditions and 6.7 points for future expectations.
“The year-over-year gains in both indexes hold true for every region across the board, indicating the very broad-based strength of this market,” said NAHB Chief Economist David Seiders. “What’s more, substantial year-over-year gains are apparent for every single component of the future expectations index — including calls for bids and amount of work committed for the next three months for both owner- and renter-occupied dwellings, plus overall job backlogs and appointments for proposals.”
The Northeast was the strongest region for professional remodeling in 2003’s third quarter, posting the highest RMI readings for both current market conditions and future expectations. While the Midwest, South and West all posted a slight decline from exceptionally robust RMI readings in the previous quarter, all four regions registered gains from a year earlier.
Meanwhile, results of the “special questions” section of the RMI provide valuable insight into the typical general remodeler’s experience in the industry, educational background and company profile.
“The vast majority of our members are longtime veterans of their profession who’ve built solid reputations and substantial credentials over the years,” said Weiss.
Ninety percent of survey respondents have been in the business for 10 years or more; 59% have at least 20 years experience. About 9% have between five and nine years of experience, while just 1% have been in business for two to four years, and a statistically insignificant number have less than two years’ experience.
The typical general remodeler also boasts an impressive educational background. Of those surveyed, 78% either have a college degree or have completed at least some college training Another 10% have earned an advanced degree of some kind.
“Another interesting finding is that the operating head of most general remodeling companies is most often a baby boomer,” said Weiss.
Fully 57% of those surveyed indicated that the head of their business (whether that person is the respondent or not) is 45-54 years of age. Nineteen percent said the person in charge is 35-44, while 12% said their company head is 55-64 years old, 7% said that person is 65 or older and 6% said he or she is 34 years or younger.
Also notable, the number of general remodelers who operate as sole proprietors has declined significantly over the last year and a half. The number of remodelers reporting that they had sole proprietorships declined from 23% in the first quarter of 2002 to only 17% in this year’s third quarter.
The most popular type of remodeling company continued to be S Corporations, which accounted for 49% of responses (up slightly from 46% in early 2002). C Corporations accounted for 21% of responses, while just 3% said their companies are partnerships.
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