Houzz has released the Q1 Renovation Barometer, which tracks confidence in the home renovation market among industry professionals.
The Q1 Barometer readings reflect strong quarter-over-quarter confidence for all industry groups, with readings of 68 or higher, indicating a seasonal uptick in market activity. The readings for Q1 are in line with scores for the same quarter in 2015, with the exception of architects and outdoor specialty firms that report somewhat weaker confidence scores in Q1. All industry groups report a rosy outlook for the second quarter of the year.
Labor continues to pose a top challenge for renovation-focused firms, with nearly four in five general contractors, remodelers and design-build firms reporting moderate-to-severe shortages across a wide range of skilled trades, consistent with 2015 Barometer findings. Three in four firms reporting shortages are hiring employees or subcontractors in those in-demand trades. In order to attract young workers, 39% of remodeling-focused companies are offering on-the-job training. Another 21% are leveraging social media to help promote job opportunities to new talent. Some firms are taking more extensive measures, such as partnering with local colleges to offer training programs, attending recruiting events and/or giving talks at local colleges and/or high schools to reach potential future hires.
“While Barometer readings continue to reflect year-over-year market improvements across industry groups, these gains are somewhat less widespread than those we saw in the same period of 2015,” said Nino Sitchinava, principal economist at Houzz. “Consistent with our projections in the Houzz State of the Industry report at the beginning of the year, we are seeing early evidence that 2016 will be a year of more moderate yet steady growth for residential renovation and design businesses.”
Additional findings from the Q1 Houzz Barometer include:
• Year-Over-Year Gains Persist: The Barometer posted high year-over-year readings of 70 to 78 in Q1, roughly in line with scores for Q4 2015 (72-76). While confidence continues to be high, four of the six industry groups report somewhat weaker scores in Q1 relative to Q1 2015.
• Quarter-Over-Quarter Uptick in New Business Activity: The majority of firms report quarter-over-quarter growth in the number of new business inquiries and the number and size of new projects in Q1. Expectations for quarter-over-quarter gains in Q2 are sky-high across all new business metrics, particularly among general contractors and remodelers, building/renovation specialty firms and outdoor specialty firms.
• Finish Carpenters in Shortest Supply: Consistent with 2015 Barometer findings, general contractors, remodelers and design-build firms report that carpenters are in the shortest supply across the U.S.
For more information, visit houzz.com.