A large part of the optimism surrounding an economic recovery this week is due to evidence of a surge in spending on homebuilding and remodeling.
Although the housing sector of the economy is still showing signs of weakness in the supply of distressed properties and lingering reluctance of lenders to provide mortgages, several corporations related to housing are reporting strong sales last quarter, according to The Wall Street Journal.
Oshkosh Corp. saw an increase in orders for cement mixers and forklifts in the last quarter of 2012; Honeywell says sales of heating and cooling systems rose by 6 percent during that time, and DuPont is reporting higher demand for carpet fiber.
Robust spending on home improvement in the last half of 2012 is adding fuel to a burgeoning recovery, according to the Leading Indicator of Remodeling Activity, or LIRA, that was released this month by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
Based on last year's numbers, LIRA projects double-digit growth for home improvement spending in 2013. Although the recovery is not on solid footing yet, Eric S. Belsky, managing director of the Joint Center, sounded a positive note in a statement. "Through the first three quarters of 2012, investment in the residential sector was responsible for 1 out of every 6 dollars added to our (gross domestic product)," he stated. "Moving forward, home improvement spending is expected to make an even larger contribution to GDP growth."
Keep up with your wealth and mortgages, and follow me on Twitter @JudyMartel.
Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.