Inside Houzz
Renovation Barometer
Industry Research
Home Renovation Pros Paint a Bright Picture for the Rest of 2018
The Houzz Renovation Barometer for fourth quarter 2018 shows that wait times to work with a building firm have dropped
Firms Expect Business Activity to Continue in Positive Territory
Construction firms. Build-only remodelers, design-and-build remodelers and specialty trade contractors working on upgrades to existing homes anticipate an uptick in new projects, as well as inquiries from would-be clients about new projects as the year comes to an end.
The Expected Business Activity Indicator, one component of the Barometer, increased to 79 for the last three months of the year for firms in the construction side of the industry. That is a 6-point jump relative to the previous three months (July, August and September).
The Expected Business Activity Indicator is based on survey questions that asked businesses to report whether they expected the number of project inquiries and new projects to increase, decrease or stay unchanged in the upcoming three months compared with the prior three months. A score higher than 50 indicates that more firms reported increases than firms that reported decreases.
Therefore, a score of 79 for this indicator suggests that, in general, construction firms have fairly rosy expectations for their businesses right now.
Construction firms. Build-only remodelers, design-and-build remodelers and specialty trade contractors working on upgrades to existing homes anticipate an uptick in new projects, as well as inquiries from would-be clients about new projects as the year comes to an end.
The Expected Business Activity Indicator, one component of the Barometer, increased to 79 for the last three months of the year for firms in the construction side of the industry. That is a 6-point jump relative to the previous three months (July, August and September).
The Expected Business Activity Indicator is based on survey questions that asked businesses to report whether they expected the number of project inquiries and new projects to increase, decrease or stay unchanged in the upcoming three months compared with the prior three months. A score higher than 50 indicates that more firms reported increases than firms that reported decreases.
Therefore, a score of 79 for this indicator suggests that, in general, construction firms have fairly rosy expectations for their businesses right now.
Architectural and design services firms. Similarly, more architects and interior designers also expected renovation business activity to rise in the last three months of the year. Their score of 64 indicates that more firms anticipated increases than firms that anticipated decreases.
However, these firms are not as glowingly positive about expected business activity as they were during the previous three months, and hence the drop in the index from 69 to 64.
Overall, the expectations of architectural and design firms are consistently more subdued compared with construction firms.
However, these firms are not as glowingly positive about expected business activity as they were during the previous three months, and hence the drop in the index from 69 to 64.
Overall, the expectations of architectural and design firms are consistently more subdued compared with construction firms.
Project Wait Times Have Decreased Nationally
Construction firms. Construction businesses focused on remodeling reported that project backlogs — meaning the number of weeks a new client must wait before a firm can take on that client’s midsize project — dropped to 4½ weeks nationally from 6½ weeks in the prior three months, a two-week drop in average wait times, according to the Barometer’s Backlog Indicator for this group.
Construction firms. Construction businesses focused on remodeling reported that project backlogs — meaning the number of weeks a new client must wait before a firm can take on that client’s midsize project — dropped to 4½ weeks nationally from 6½ weeks in the prior three months, a two-week drop in average wait times, according to the Barometer’s Backlog Indicator for this group.
Within the construction firms, build-only remodelers have the longest average wait times before they can take on a midsize project, at 6.8 weeks. Specialty trade contractors — such as those that do masonry, painting, or electrical work — have the shortest project wait times, at three weeks. Wait times for design-and-build remodelers are 5.8 weeks.
Architectural and design services firms. The Backlog Indicator for architectural and design firms fell to an average of 5.1 weeks nationally for the last three months of the year. That is a decrease of half a week compared with the prior three months.
Architects and interior designers have similar wait times to take on a new midsize project, at 5.1 weeks and 5.2 weeks respectively.
Recent Business Activity Also Increased
Construction firms. A rise in new-project inquiries and new projects in July, August and September pushed the Recent Business Activity component of the Barometer up to 71 for construction firms.
The Recent Business Activity component looks at actual activity over the past three months. It is based on survey questions that ask businesses to report whether they observed the actual number of project inquiries and new projects increasing, decreasing or staying unchanged in the past three months relative to the prior three months. Recent Business Activity Indicator scores can be compared with the Expected Business Activity Indicator scores for any given three-month period or quarter to see whether actual activity met, exceeded or fell short of expectations.
The score of 71 for the most recent three months is a six-point increase relative to the score for April, May and June.
Construction firms. A rise in new-project inquiries and new projects in July, August and September pushed the Recent Business Activity component of the Barometer up to 71 for construction firms.
The Recent Business Activity component looks at actual activity over the past three months. It is based on survey questions that ask businesses to report whether they observed the actual number of project inquiries and new projects increasing, decreasing or staying unchanged in the past three months relative to the prior three months. Recent Business Activity Indicator scores can be compared with the Expected Business Activity Indicator scores for any given three-month period or quarter to see whether actual activity met, exceeded or fell short of expectations.
The score of 71 for the most recent three months is a six-point increase relative to the score for April, May and June.
Architectural and design services firms. Similarly, architectural and design businesses reported that new projects and new project inquiries rose from July through September. The Recent Business Activity Indicator for this sector rose to 60, a 3-point increase over the score for April, May and June.
The Houzz Renovation Barometer is based on a quarterly online survey sent to a national panel of U.S. businesses with a profile on Houzz. The Barometer includes three components: expected business activity, recent activity and backlogs (or wait times).
The Q4 2018 Houzz Renovation Barometer was fielded from Sept. 27 to Oct. 8, 2018.
If you would like to offer your insights on market conditions in your area by joining the Barometer panel, please click here.
More
Q4 2018 Houzz Renovation Barometer: Construction Sector
Q4 2018 Houzz Renovation Barometer: Architectural and Design Sector
The Q4 2018 Houzz Renovation Barometer was fielded from Sept. 27 to Oct. 8, 2018.
If you would like to offer your insights on market conditions in your area by joining the Barometer panel, please click here.
More
Q4 2018 Houzz Renovation Barometer: Construction Sector
Q4 2018 Houzz Renovation Barometer: Architectural and Design Sector
“Home renovation professionals are clearly very upbeat about the year end, despite a number of challenges facing the industry today,” says Nino Sitchinava, principal economist at Houzz.
The data come from the Q4 2018 Houzz Renovation Barometer, which tracks residential renovation market expectations, project wait times and recent business activity. (Market expectations and business activity have been smoothed out to account for predictable seasonal fluctuations, while project wait times have not.) The Barometer is based on a quarterly survey of residential remodeling businesses with a profile on Houzz and garnered 1,750 responses. Read on to gain insights from what they said.