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Takeaways:
- Home renovation professionals are having a banner year across different types of renovation specialization.
- About a fifth to a quarter of firms reported that revenues and profits are significantly above normal levels, while a quarter to a third are reporting that they are somewhat above normal.
- Western architects are especially confident, as are Southern specialty firms.
Home renovation professionals are having a banner year, with many firms reporting healthy revenues and profits, plus optimism for continued market growth.
And it doesn’t matter what kind of renovation they specialize in; whether they are architects, interior designers, general contractors, remodelers, design-build firms or landscapers, they’re seeing revenues and profits return to prerecession levels.
Those are the various segments that Houzz, a website that provides home remodeling and design information for both home professionals and homeowners, recently polled about their confidence in market conditions.
According to the quarterly Houzz Renovation Barometer, all industry groups reported strong improvement in new business activity from the first quarter to the second quarter of this year.
About a fifth to a quarter of firms reported that revenues and profits are significantly above normal levels, while a quarter to a third are reporting that they are somewhat above normal.
“A large majority of home renovation firms on Houzz report a return to prerecession revenues and profits, irrespective of industry segment or firm size,” said Nino Sitchinava, principal economist at Houzz.
There are, however, some regional differences, Houzz said. Western architects are especially confident, as are Southern specialty firms. Thanks to the harsh winter experienced by many areas of the country, outdoor renovation firms and general contractors in the Northeast are reporting an acceleration of new business activity.
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“While industry confidence remains strong for the remainder of 2015, professionals tell us that the shortage of skilled labor continues to be a key challenge to growth.”
Those surveyed also said they are optimistic that they will continue to gain new business in the third quarter.
However, they also expressed uncertainty about some ongoing trends that may impact their business, including:
- A shortage of qualified labor and resulting project delays.
- Pressure on profit margins from more price-sensitive, post-recession consumers.
- Continued economic uncertainty.
- Increased regulatory requirements from local governments and associated delays.
- Increased homeowner “do-it-yourself activity” and industry competition.
- Increased costs of materials, labor and/or overhead.
- Extreme weather fluctuations.
The Houzz Renovation Barometer tracks quarterly fluctuations in business activity related to the renovation of owner-occupied existing homes. It is the product of an online survey sent out to a national panel of architects, interior designers, general contractors/remodelers, design-build firms, and building/renovation and landscape/outdoor specialties.
