Houzz, the social media platform for home remodeling and design, has released its first Houzz Renovation Barometer which tracks confidence in the home renovation market among industry professionals.

The inaugural Houzz Renovation Barometer posted an index value of 74 or higher across all company types for the last three months of 2014, indicating optimism about a continued industry rebound, relative to the same period of 2013. Confidence in the industry’s recovery continues, with the Houzz Renovation Barometer posting an index value of 75 or higher for the first quarter. A reading above 50 indicates more firms reported an increase than a decrease in business activity related to existing homes in a given quarter than the prior quarter.

“With a community of over 25 million monthly unique users, 90% of whom are homeowners, and more than 600,000 active home professionals, Houzz is in a unique position to provide unprecedented insights into the health of the home renovation, building and decorating industry,” said Nino Sitchinava, principal economist at Houzz. “Barometer findings are consistent with other leading industry research and economic indicators of growth and confidence for the home improvement industry as baby boomers and growing families continue to invest in their homes.”

The Barometer study found that the economic recovery reached very small firms (firms with fewer than five employees) in 2014. Overall, revenues are improving for firms of all sizes, many smaller interior designers, landscape professionals, builders/remodelers, specialty trade and other industry firms report aggressive rates of growth (more than 50% annually), and roughly a third hired new employees in 2014. Smaller residential architects saw more moderate growth rates, but similar hiring trends. Improvements were reported in the following areas:

Across all size and professional categories surveyed, roughly one fifth of firms report annual growth rates in the 5% to 14%, 15% to 24% and more than 25% ranges. 

Number of new projects: Revenue growth was fueled by an increase in the number of new projects, as reported by 70% of architects, interior designers, and builder/remodelers and nearly 80% of landscape, specialty trade, and other industry firms (e.g., custom cabinet manufacturers).

Scale of projects: More than 60% of all firms reported improvements in the scale of projects, in terms of contract dollars per project. Architects were the exception at 49%. 

The vast majority of professionals are bullish for 2015. Over 80% of interior designers, landscape professionals, builder/remodelers, and specialty trade and 70% of architects expect revenues and profits to grow this year. That optimism translates to hiring plans, with nearly half of builders/remodelers and specialty trade firms expecting to grow their employee base this year. Despite the rosy outlook for the year, firms are concerned about shortages of qualified labor and subcontractors, the shift toward a budget-conscious homeowner, and the uncertain U.S. and world economic and political climates.

For more information, visit houzz.com.