Home renovation

Expect More Growth in the Home Improvement Industry, Houzz Reports

Houzz, the home improvement and design platform, has released its annual State of the Industry in the United States report, which shows record four-year revenue growth.

The report also offers forecasts for the remainder of 2022 based on data from more than 2,800 professionals across seven home design sectors: architects, interior designers, general contractors (grouped with remodelers and builders), design-build companies, specialist renovation companies, specialist landscapers. companies and companies specializing in decoration. And the home improvement industry seems confident.

“After a busy year for the home improvement and design industry…Professionals are optimistic the momentum will continue through 2022,” said Houzz Senior Economist Marine Sargsyan, in a press release. “Positive outlook prevails across all industry groups, from architects and designers to builders and landscapers, despite headwinds in the form of labor and product availability and price volatility.”

Specifically, 71-77% of participating home construction and design companies expect 2022 to be a good or very good year. And of the seven sectors surveyed, architects have the most optimistic outlook — for the first time since 2018. 77% of architects expect a good or very good year, followed closely by general contractors and design firms – construction (each at 73%). Companies across all industry groups expect revenue growth of between 5% and 9% in 2022.

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This confidence follows substantial returns in 2021, which exceeded last year’s expectations. The companies surveyed all reported revenue growth of between 9% and 12%, marking the largest year-over-year increase in the past four years. Five of the seven sectors saw their revenues increase by more than 10%.

And with the growth of the industry, hiring is also on the rise with more employees hired in 2021 than in 2020. Design-build companies hired the most, posting a 34% increase in the number of employees. employees from one year to the next,
followed by general contractors and builders (both at 28%) and landscaping companies (27%). Overall, hiring is expected to continue across all industry sectors in 2022, although businesses expect labor availability to deteriorate, which will likely increase business costs.

Of all professionals surveyed, around half expect a decrease in the workforce, and across all seven sectors, between 49 and 64% of respondents believe this will lead to increased costs. And, as material shortages continue, these labor issues are occurring alongside broader price volatility.

All seven sectors cited product and material price volatility as one of their top concerns. General contractors, design-build firms and renovation specialists cited price volatility (47-55%) and material availability (37-40%) as the top challenges faced in 2021. Additionally, more than half of the business groups surveyed expect the price of products and materials to rise further in 2022.

However, an increase in demand is still expected in all seven industrial sectors. Between 41 and 54% of respondents believe demand for their services will increase in 2022, with interior designers showing the most confidence: 54% say demand for their services will increase.

“Accumulated home equity and other industry fundamentals continue to drive demand for improvements to aging housing stock and upgrades that will allow homeowners to stay in their homes until retirement,” said Sargsyan said.