2018 U.S. Houzz State of the Industry
Findings from a survey of 3,378 U.S. residential renovation and design businesses on Houzz providing an outlook on 2018 and review of 2017 performance.
Positive outlook for 2018: Building on a strong 2017, more than two-thirds of surveyed companies that specialize in residential renovation or design cite a good or very good outlook for 2018 (a range of 71%-88% over seven industry groups). Four of the industry groups expect annual gross revenues to grow on average at similar or higher rates in 2018 (10.5%-12.3%) as compared with the actual rates in 2017 (7.2%-10.6%). Architects and design-build companies are the exception, anticipating growth rates somewhat lower than in 2017.
National economy and labor market headwinds: While two-thirds of companies across industry groups expect the demand for their services to improve in 2018, the outlook for the national economy appears to be polarized. At least a quarter of companies in each industry group expect the national economy to improve (25%-38%), while a meaningful share expect conditions to deteriorate (12%-28%). Furthermore, companies expect labor availability to tighten and labor costs to rise in 2018.
Growth accelerated in 2017 for many: Three of the seven industry groups surveyed experienced an accelerated average revenue growth in 2017 as compared to 2016, while growth of the other industry groups remained in line with 2016. In particular, design-build companies saw their average annual growth rate increase 3 percentage point increase in 2017 over 2016 (from 8.3% to 11.3%). Consistent with 2016, companies report that business costs continued to rise in 2017, citing labor, products, and materials as the top cost drivers.
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Read the Data Watch Story: Most Renovation and Design Firms Are Bullish on 2018
Growth accelerated in 2017 for many: Three of the seven industry groups surveyed experienced an accelerated average revenue growth in 2017 as compared to 2016, while growth of the other industry groups remained in line with 2016. In particular, design-build companies saw their average annual growth rate increase 3 percentage point increase in 2017 over 2016 (from 8.3% to 11.3%). Consistent with 2016, companies report that business costs continued to rise in 2017, citing labor, products, and materials as the top cost drivers.
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