CAMBRIDGE, Mass. —July 17, 2013 — Revisions to the U.S. Census Bureau’s recent year estimates of home improvement expenditures in the C-30 Construction Spending Series, released July 1, increased estimates of home improvement spending by 6% for 2011 (from $114 billion to $121 billion) and decreased spending over 10% for 2012 (from $125 billion to $112 billion).
Although the revisions are routine, the numbers took those who closely follow such numbers by surprise. As a result, the Leading Indicator of Remodeling Activity (LIRA), released quarterly by the Harvard Joint Center for Housing Studies and scheduled to be released Thursday, July 18, 2013, will not be issued. “At this time, there is no obvious explanation for why the revisions to the C-30 improvements data were so extreme this year,” says research analyst Abbe Will, writing in the Joint Center’s blog.
“Typically, these annual revisions are minimal and, in the past, changes were always in the same direction as the original estimates, often revising the whole series downward somewhat. This time, not only was the magnitude of the revisions significantly larger than in recent years, but the direction of the revisions was extremely divergent from what could have been expected based on previous annual revisions,” she continues.
Total revenue reported by Qualified Remodeler's Top 500 shows a corresponding drop from 2011. Revenue from 2011 was $7.979 billion, dropping to $6.756 billion in 2012. Even though revenue dropped for 2012 for QR's sample of leading remodelers, the number of jobs reported increased, suggested that remodelers were doing a greater number of smaller jobs.
“As part of the Joint Center’s investigation of this issue, we will be in contact with the federal agencies involved in collecting the survey data and developing these estimates to assess whether changes in survey methodology or weighting procedures, for example, might explain these large shifts,” Will adds.
The next LIRA is scheduled for release on October 17, 2013. For more information about the revisions, visit the JCHS blog.