Data Watch: Confidence Rising, but Labor Shortages Worry Many Pros
The latest Houzz Renovation Barometer report shows industry pros are rosy about the market while still struggling to find skilled workers
Mitchell Parker
April 19, 2016
Houzz Editorial Staff. Home design journalist writing about cool spaces, innovative trends, breaking news, industry analysis and humor.
Houzz Editorial Staff. Home design journalist writing about cool spaces, innovative... More
While confidence in the overall renovation market is expected to continue to rise moderately but steadily in the coming months, when it comes to hiring workers, most professionals aren’t as optimistic. That’s because the vast majority of professionals report moderate to severe labor shortages, according to the latest Houzz Renovation Barometer report, which tracks industry optimism among general contractors and remodelers, design-build firms, building and renovation speciality firms, and landscape and outdoor specialty firms.
“In light of labor shortages, home renovations professionals should plan for extended timelines, and consider increasing service fees to maintain profit margins given likely wage pressures,” says Nino Sitchinava, principal economist at Houzz. “Going forward, we also expect to see greater efforts from all industry sectors and stakeholders to attract millennials to skilled trades.”
“In light of labor shortages, home renovations professionals should plan for extended timelines, and consider increasing service fees to maintain profit margins given likely wage pressures,” says Nino Sitchinava, principal economist at Houzz. “Going forward, we also expect to see greater efforts from all industry sectors and stakeholders to attract millennials to skilled trades.”
Finding Skilled Workers Is a Challenge
This graph shows a breakdown of sought-after laborers in the renovation industry. Finish carpenters are in the shortest supply, and therefore in the highest demand. General laborers aren’t far behind, though, followed by framers and tilers. These findings are similar to previous Barometer reports.
This graph shows a breakdown of sought-after laborers in the renovation industry. Finish carpenters are in the shortest supply, and therefore in the highest demand. General laborers aren’t far behind, though, followed by framers and tilers. These findings are similar to previous Barometer reports.
The situation is particularly tough in the Midwest, as this graph shows. General contractors, remodelers and design-build firms there are 50 percent more likely to be short on general labor and labor for framing, tile, drywall, concrete and flooring than employers in the Northeast.
Pros Reaching Out to Young Workers
In response to the labor shortages, many professionals are getting proactive. More than a third of industry pros are offering on-the-job training to attract young workers, as this graph shows. Others are leveraging social media to spread awareness about open positions. Some are even taking more extensive measures, such as partnering with local colleges or companies to offer training programs, or giving talks at local colleges and high schools and offering to pay for student loans to entice a young workforce.
In response to the labor shortages, many professionals are getting proactive. More than a third of industry pros are offering on-the-job training to attract young workers, as this graph shows. Others are leveraging social media to spread awareness about open positions. Some are even taking more extensive measures, such as partnering with local colleges or companies to offer training programs, or giving talks at local colleges and high schools and offering to pay for student loans to entice a young workforce.
Number of Projects Is on the Rise
Probably the main reason professionals are eagerly seeking more skilled laborers is because the majority of firms are seeing an increase in the number of project inquiries and the number and size of new projects in the first quarter of 2016 compared with the last quarter of 2015, as well as year over year. It’s hard to take on more work and larger projects without the right-size workforce.
What’s more, these gains are expected to soar among all industry groups for the second quarter of 2016, with general contractors and remodelers, building and renovation specialty firms, and outdoor specialty firms appearing particularly optimistic.
Probably the main reason professionals are eagerly seeking more skilled laborers is because the majority of firms are seeing an increase in the number of project inquiries and the number and size of new projects in the first quarter of 2016 compared with the last quarter of 2015, as well as year over year. It’s hard to take on more work and larger projects without the right-size workforce.
What’s more, these gains are expected to soar among all industry groups for the second quarter of 2016, with general contractors and remodelers, building and renovation specialty firms, and outdoor specialty firms appearing particularly optimistic.
Confidence Is Rising Moderately but Steadily
The report, conducted between March 29 and April 13, 2016, among more than 3,000 industry professionals, indicates strong continued confidence in year-over-year market gains among all professionals in the first quarter of 2016. However, four out of the six industry groups — designers, architects, design-build firms and building and renovation specialty firms — report somewhat weaker confidence compared with the first quarter of 2015.
That said, the outlook for the quarter-over-quarter market gains in the second quarter of this year appears quite rosy across all industry groups, as this graph indicates.
The report, conducted between March 29 and April 13, 2016, among more than 3,000 industry professionals, indicates strong continued confidence in year-over-year market gains among all professionals in the first quarter of 2016. However, four out of the six industry groups — designers, architects, design-build firms and building and renovation specialty firms — report somewhat weaker confidence compared with the first quarter of 2015.
That said, the outlook for the quarter-over-quarter market gains in the second quarter of this year appears quite rosy across all industry groups, as this graph indicates.
Probably due to wetter weather conditions, Western firms reported weaker confidence in the first quarter of 2016 compared with the same quarter of 2015. But again, confidence for the second quarter of 2016 remains high. After all, everyone benefits from nicer weather.
“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,” Sitchinava says.
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I recently met a man that heads a good sized electrical contracting firm the DFW area. He told me that he turns down work because he does not have enough electricians, and he doesn't understand why more young people don't choose this field, since he starts journeyman at $30/hour.
Also, I know a woman that did HVAC certification, made an excellent living, and then sold the business when she was 50.
Starting out in a trade, even in a big city area, you are starting out at less than Fast food chain wages...so why work a trade, destroy your body, get screwed by the Unions taking even more of your money: when you can go to college, work at a place that pays better benefits (unions barely cover dental and eye care-they SAY they do, but then deny the claims religiously) and not have back, knee and shoulder problems later in life(we don't get footballers salary~so our futures are filled with Dr.'s appointments that lead to unaffordable solutions)...If we are worried about skilled labor, maybe we should think about paying them better. Don't patronize me I come from generations of union workers and skilled laborers; additionally, my husband is currently part of a Union so I DO know what I am talking about. I live it, my neighbors live it and the rest of the workers we work side by side with know what I am saying. Sugar coat it however you like, but we are NOT taken care of properly yet needed so badly...