Houzz released the Q3 Renovation Barometer, which tracks confidence in the home renovation market among industry professionals.
The Q3 Barometer revealed that optimism in quarter-over-quarter market improvements remains high across industry professionals, with high index scores of 65 or higher in market confidence. However, readings for Q3 are 6% to 11% lower than readings from Q2 across all industry groups. Landscape specialty firms are the exception, having reported a decrease of 21%, likely due to seasonal patterns.
Hiring remains a top challenge for renovation professionals across industry sectors in Q3. General contractors (GCs), remodelers and design-build firms report that carpenters are in the shortest supply across the U.S. (cited by 45% of firms), followed by framers (25%), tile (22%) and drywall specialists (21%). Interestingly, more than one in five architects and interior designers report shortages of general contractors (24% and 21% respectively). Labor shortages are reported to be most prevalent in the Midwest and least severe in the Northeast.
“Barometer readings consistently show year-over-year gains in the past three quarters, pointing to healthy improvements in the remodeling industry in 2015 over 2014,” said Nino Sitchinava, principal economist at Houzz. “The headwinds slowing overall industry performance are widespread labor shortages, particularly in the Midwest.”
Additional findings from the Q3 Barometer include:
• Widespread New Business Growth: Firms report growth across the number of new business inquiries, and the number and size of new projects in Q3 (Barometer readings of 63-74, 66-74, and 60-69, respectively). Readings are down slightly from Q2 across all three leading new business indicators, likely due to the start of a seasonal slowdown, as well as the backlog of projects from the spring months, among other factors.
• Year-Over-Year Gains Continue: Widespread year-over-year improvements continued across all industry groups in Q3 2015, relative to the same period in 2014. The Barometer posted readings of 74-79, largely in line with Q2 scores (75-83). Readings in excess of 70 points for all three quarters of 2015 point to strong industry confidence in renovation market improvements in 2015 relative to 2014.
• Outdoor Specialty Confidence Varied by Region: While outdoor specialty firms are feeling the seasonal slowdown earlier than other industry groups, Northeastern and Midwestern outdoor firms are hit the hardest, as reflected by the 36% and 30% quarter-over-quarter decreases in Barometer scores for the third quarter, respectively. Meanwhile, outdoor firms in the South and West saw significantly lower decreases (21% and 10% respectively).
For more information, visit houzz.com.