Industry Corner: DIY Home Products: A Global Perspective

By Brogan, Darrin M.; Cort, Stanton G. | Business Economics, January 1997 | Go to article overview

Industry Corner: DIY Home Products: A Global Perspective


Brogan, Darrin M., Cort, Stanton G., Business Economics


The DIY (do-it-yourself) home products industry encompasses products purchased by consumers in retail outlets (or, in some cases, directly from the manufacturer) in order to maintain, repair, alter, add on to, or replace any part of a residential structure. As "DIY" suggests, consumers buy for self-installation, not contractor installation. Outlays for DIY home products are a subset of overall expenditures for residential repairs and improvements. DIY activity in new residential construction is very limited. Few people build their own homes.

The DIY industry can encompass a very broad array of products. This discussion addresses the product categories that require or are used in installation. We will discuss hardware and tools (i.e., builders' hardware, fasteners, nails, power tools and hand tools), paints, coatings and sealants, building materials (i.e., lumber, wood panels, gypsum, etc.), kitchen and bath products (i.e., plumbing fixtures and fittings, cabinets, vanities and pipe), windows and doors, roofing, siding and insulation, flooring (both hard surface flooring and carpeting), heating and cooling equipment, electrical devices and various miscellaneous products. We will not address related products that are not permanently attached or firmly affixed to some part of the house or property and which do not require any special effort to install. Examples are furniture, rugs, most appliances, light bulbs, room air conditioners, curtains and draperies, etc.

The DIY market is highly dependent on factors correlated with the expansion and financial stability of the aggregate housing environment, including both new and existing homes. Among the factors are residential construction outlays, trends in mortgage interest rates, availability of financing, household formations, demographic and employment factors, and consumer income and spending patterns. Another prominent indicator is fluctuations in labor and material costs. All of these indicators in turn affect building repair and refurbishment patterns (i.e., whether consumer outlays are geared toward maintenance and repairs, additions and/or replacements). They also help dictate not only the homeowners' ability and propensity to invest in the repair and/or refurbishment of their homes, but also his/her need to do the work without the aid of professional contractors.

The share of residential repair and improvement expenditures devoted to DIY projects also varies - often substantially - by type of residence. Factors affecting housing and household formation by market (i.e., single-family, multifamily and manufactured housing) are also significant determinants of DIY demand. Other, less tangible, variables affecting the size of the DIY market are consumer preferences for activities, availability of leisure time, and trends in product design (e.g., preassembled components) and availability.

MARKET SIZE AND OUTLOOK

The DIY home products market is inherently difficult to quantify. There is no standard definition of all products included in the industry. Moreover, the actual sale of a product to the DIY end user is rarely differentiated explicitly on a transaction basis from sales to contractors. In order to estimate market size and outlook, therefore, we have chosen to look at manufacturers' total sales of individual product groups included in the DIY home products industry. Then we estimate the percentage of these products going to residential replacement, i.e., repairs and improvements. Finally we estimate the percentage of residential replacement that is accounted for by DIY consumer demand.

Another approach is to use sales of products by retail home centers, hardware stores and related outlets. Unfortunately, such retailers carry a huge array of products that are not necessarily indicative of actual trends in DIY building activity. In addition, it is not clear what percentage of these retailers' sales are to DIY consumers. They also sell substantial volumes to professionals like building contractors and maintenance crews. …

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