If you feel that your woodworking business is not doing better today than it was a year ago, you might want to check your pulse. While you may not be alone, you are decidedly in the minority.
Our recent conversations with wood product executives and suppliers alike - from the Closets Expo in Austin, TX, and the Kitchen & Bath Show in Chicago through the Woodworking Industry Conference in Delray Beach, FL, and the Architectural Woodwork Institutes's Leadership Conference in Dallas - ring far more positive than negative. This is not to suggest that many of the folks we have talked to our reliving the glory years of 2006. They are not. But there is a genuine sense that the worst is over and that more business opportunities are opening up.
One of my personal favorite barometers is the Kitchen Cabinet Manufacturers Association's monthly Trend of Business Survey. According to the KCMA, cabinet sales were up 3% for the first three months of the year compared to the first quarter of 2011. That may not sound like much, but when you consider that the housing market crash cut cabinet sales in about half, it's encouraging to see even seemingly small black numbers instead of the red double-digit declines that KCMA regularly reported in 2008 and 2009.
Here's some more evidence that gives reason for optimism:
* The housing market remains depressed in an historical context; the 607,000 single and multi-family homes that were built last year are a far cry from the 1.5 million target that most economists view as normal. While still falling short of that goal, Kiplinger forecasts housing starts to reach 720,000 this year, which would translate to a 18.6% increase.
* As for home sales, Fiserv recently reported that home prices appear to have hit bottom and are showing signs of stabilization. The leveling off of home prices is important considering that the steep decline in home prices fueled the financial crisis.
* On the remodeling front, a new survey by the National Association of Home Builders notes that the number of kitchen and bath projects have increased 17% compared to the NAHB's last remodeling study conducted in 2010.
* Home remodeling sales are expected to increase 5.9 percent this year, according to the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
Things were never as bad for our woodworking neighbors to the north, whose biggest problem was losing export opportunities to the U.S. Canada’s housing market slipped but never crashed. The market was relatively strong last year and is looking to be even more solid in 2012. According to the latest report by Canada Mortgage and Housing Corporation, housing starts reached 244,900 units on a seasonally adjusted average.
We still have a long way to go, but at least we're headed in the right direction.
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