Home Improvement Faces Long, Hard Slog

The home improvement sector is expected to drop this year after declining for the second straight year in 2008, according to a report released on Thursday by Fitch Ratings.

This does not bode well for home furnishing retailers Home Depot (HD Quote) and Lowe's(LOW Quote), both of which reported better-than-expected earnings last week. Other companies that could be affected are PPG Industries(PPG Quote), the supplier of coatings, glass, fiberglass and chemicals; pain and coating maker Sherwin-Williams(SHW Quote), Masco(MAS Quote) and Black & Decker(BDK Quote).

"Consumers are not spending as much on home remodeling with new and existing home sales at record lows and home prices continuing to plummet," Robert G. Rulla, CFA at Fitch Ratings wrote in the note. "The weak economy, combined with mounting job losses and poor consumer confidence, has also taken a toll on overall spending. In addition, with the credit markets still tight, the prospects for home improvement spending, at least through 2009, remain challenging." ...