Data Watch: Home Renovation Industry Confidence Remains High
The latest Houzz Renovation Barometer, which tracks the renovation industry, shows high quarter-over-quarter optimism among home renovation professionals that the market continues to improve. That said, readings show a six to 11 percent dip in confidence compared with last quarter across all industry groups (with the exception of outdoor professionals, who report a drop of 21 percent), probably due to seasonal slowing, hiring challenges and a backlog of projects from the spring months.
“Despite the start of a seasonal slowdown in incoming inquiries and new projects this quarter compared to last,” said Nino Sitchinava, the principal economist at Houzz, “the barometer readings consistently show year-over-year gains in the past three quarters of 2015, pointing to healthy improvements in the remodeling industry compared to last year.”
Hiring remains a challenge. Hiring remains one of the biggest roadblocks for renovation professionals across industry sectors in the third quarter. General contractors (GCs), remodelers and design-build firms report that carpenters are in the shortest supply across the U.S. (cited by 45 percent of firms), followed by framers (25 percent), tilers (22 percent) and drywall specialists (21 percent). Labor shortages are reported to be most prevalent in the Midwest and least severe in the Northeast.
The bigger, the better. When it comes to market conditions for architectural and interior design firms, larger firms have done better than small firms, according to the second-quarter barometer. For example, 31 percent of interior design firms with more than five employees report profits significantly above pre-recession “normal” levels, compared with 20 percent of individual interior designers.
Small is big when it comes to the landscape. While the larger firms are seeing the biggest gains in architecture and interior design, it’s good to be a smaller firm when it comes to landscape design, according to the second-quarter barometer. For example, 37 percent of individual landscape designers report profits significantly above pre-recession “normal” levels, compared with 23 percent of landscape design firms with more than five employees.
A strong year so far. Widespread year-over-year improvements continued across all industry groups in the third quarter of 2015, relative to the same period in 2014. The barometer posted readings of 74 to 79, largely in line with second-quarter scores (75 to 83). Readings in excess of 70 points for all three quarters of 2015 point to strong industry confidence in renovation market improvements.
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