The Housing Starts Projections - Essay Example

The values for the last 5 years show a continuous declining trend. The following table summarizes the historic actual values.YearHousing Starts (million)2006 (November)1.80120052.06820041.95520031.84720021.70420011.602 From the above statistics, it can be concluded that the demand for power tools in this sector may not increase in 2007 as the economic activity is declining.

The demand may in fact decrease since the lesser number of houses will be developed.2. Expenditure for Residential ConstructionThe expenditure for residential construction is expected to be at $504 billion as per Realtor, and $434 billion as per Haughey, in 2007. This shows a declining trend as the last year's (2006) figures show that the expenditure was $581 billion and $608 billion for 2005 (Realtor, 2007). The actual historic data is shown in the table below (U.S. Census Bureau: 930 - Value of Private Construction Put in Place: 1995 to 2005, 2007).

YearExpenditure on Residential Construction ( $ billion)2005642.2762004564.8272003475.9412002421.9122001388.324(www.census.gov/compendia/statab/construction_housing/construction_indices_and_value) This declining trend indicates that this sector will have less demand for power tools in 2007 than it was in prior years. This is because the expenditure for construction will decrease and the power tools industry provides the tools that are used for construction. Hence, demand will be negatively affected by this market.3. Expenditures for Residential Improvements and RepairsThe expenditure for residential improvements and repair is estimated to increase by 1.

6% in 2007 as compared to 2006 (Home Improvement Research Institute, 2007). It has been $457.4 billion up to the second quarter of 2006 and was $860.8 billion in 2005. The historical values are shown below (U.S. Census Bureau, 2007). This shows that there is an increasing trend in this market.YearExpenditure for Residential Improvements & Repair ($ billion)2005860.82004602.12003707.02002689.72001627.3(http://www.census.gov/const/C50/histtab1.pdf)The power tools industry should prosper in this sub-sector of the construction industry, as the estimated expenditure for this sector will improve over the last year's figures.

Residential improvements and repairs require tools, and power tools suppliers might experience an increase in the demands of their products in this market sector.4. Expenditures for Commercial ConstructionThe expenditure for commercial construction is estimated to remain at $404 billion, as compared to $360.9 billion in 2006 (Haughey, 2007). The historical values are shown below (U.S. Census Bureau: 930 - Value of Private Construction Put in Place: 1995 to 2005, 2007).YearExpenditure on Residential Construction ( $ billion)2005256.