The 2020 Mid-Year Economic Update_long

Construction Activity Boosting 1Q HD Supply Sales

Residential construction could be key to 2014 economic growth.
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In the first quarter of 2014, nearly all of HD Supply’s units gained traction in sales, and company executives noted that construction is one of the main areas showing promise for the remainder of 2014. But weather and demand still plague construction projects and could affect future growth.

“We see good non-residential activity and momentum in markets like Denver, Boston, Washington DC, Baltimore and Miami,” CEO Joe DeAngelo says. “Summer activity will obviously be (an) important data point to assess the end-market traction. We continue to monitor the residential data closely, which is showing recent weakness that we believe is potentially influenced by atypical weather.”

Privately-owned new homes increased only 5 percent in March compared to 2013, according to U.S. Census data. Single-family starts increased 10 percent in April compared to 2013, but that number is up less than 1 percent over March 2014.

Will Stengel, senior vice president for HD Supply’s strategic business development and investor relations, says that municipal construction spending is still difficult to predict. However, analysts expect that an existing pent-up demand could bring some activity throughout 2014.

HD Supply also announced a rebranding effort that will bring a consistent image throughout all company units. White Cap, the construction and industrial arm of the company, will become HD Supply Construction and Industrial.

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