When Hurricane Sandy slammed into the northeastern part of the United States, the level of damage was clearly devastating. It was the start of a tremendously difficult time for many residents of this highly populous region. When bad things happen, a silver lining often emerges. In this case, that is a positive impact on the home improvement industry.
A significant portion of the damage caused by Sandy will require demolition of the old and building of new homes. While these activities are beyond the scope of the home improvement industry, the balance of the work to repair and revitalize damaged homes is exactly what the industry is about. Therefore, there should be a significant impact to home improvement sales in this portion of the country. In recent public statements, both The Home Depot and Lowe's attributed a favorable impact on fourth-quarter 2012 results to Sandy. These positive impacts should continue into 2013.
As the Home Improvement Research Institute (HIRI) prepared its March forecast of home improvement sales, we considered the impact Sandy will have on our industry.
To gain further insight into the impact of Sandy, HIRI has conducted a special analysis of its first-quarter consumer sentiment tracking study. The study was conducted the week of Jan. 7. Other study facts:
Utilizing a list of FEMA-declared disaster areas by zip code, 5,089 respondents have been categorized as either being in Sandy's Zone (an area impacted by Sandy) or Not in Sandy's Zone. This database of responses was further refined by focusing in on the 3,422 in the study who were homeowners (the balance being renters).
An examination of the results of this analysis has many indicators that those in Sandy's Zone are planning much more home improvement work than those Not in Sandy's Zone.
While most homeowners plan to do some work in the next three months, those in Sandy's Zone are significantly more likely to be planning one or more