As economic activity in Canada slows over the next year, what will be the outlook for home renovation spending? The short answer is that it will be pulled in two directions. The long answer is that the determinants will be more heavily weighted towards the negative than the positive.

Renovation spending comprises up to 50% of total residential investment in any given year. The outlook for new residential construction as a whole is set to decline. Housing starts are on the wane across much of the country. The only regions where there are large positive increases in starts to date …