PALO ALTO, Calif. — Houzz Inc., a home renovation and design platform, released the Houzz Q1 2022 Renovation Barometer, which found confidence levels among building professionals are at an all-time high level since 2018.
The Q1 barometer went live from January 16-24 and garnered responses from 1,200 home improvement companies on Houzz. It tracks home improvement market expectations, project backlogs, and recent activity by U.S. companies in the construction industry and the architectural and design services industry.
“Business confidence in the residential construction and design industry has remained elevated since the initial shock of the pandemic and continues through 2022,” said Marine Sargsyan, senior economist at Houzz. “Companies are faced with product and material shortages and price volatility, lack of available labor and interest rate fluctuations, which can impact the indicator of recent business activity.
“That said, even with long wait times, companies are reporting no respite from pent-up demand, confirming long-standing market fundamentals.”
Barometer of the construction sector Q1 2022
In the construction industry, professionals are in line with expected business performance, although opinions differ on recent business activity for the fourth quarter of 2021. While construction renovators only report slower activity compared to the third quarter, design-build companies saw a slight increase in activity from the fourth quarter of 2021.
The expected business activity indicator related to project inquiries and new projects committed increased to 79 in the first quarter (from 74 in the fourth quarter of 2021), and the project delay indicator reached 11.4 weeks in the first trimester, more than a month longer than the same period. a year ago (7.4 weeks).
The recent business activity indicator related to project inquiries and new projects committed fell significantly to 65 in the fourth quarter (from 73 in the third quarter). This is due to a drop in project inquiries and a significant drop in new projects committed.
Barometer of the architectural and design services sector Q1 2022
Interior designers expressed optimism for business in the first quarter, reporting higher expectations than last quarter for project requests and new projects committed. Architects have changed their outlook, anticipating a decrease in project requests and new projects committed.
Both groups report slower business activity in the fourth quarter of 2021 compared to the previous quarter.
The expected business activity indicator related to project inquiries and new projects committed remained the same in the first quarter at 69. The project backlog indicator reached 7.9 weeks at the start of the first quarter. quarter, two weeks more than a year ago (5.6 weeks).
The recent business activity indicator related to project inquiries and new projects committed fell to 65 in Q4 2021 (from 70 in Q3).
Backlogs continue to grow in the industry, lengthening the time before people can start working on new medium-sized projects. Wait times are the longest when comparing the start of a year since 2018.
For the construction sector, New England has the longest backlog (13.3 weeks). Meanwhile, businesses in the West South-Central Division (which includes Texas, Oklahoma, Arkansas and Louisiana) are reporting 8.1 weeks of backlogs before they can start a new project, time to shortest wait reported by construction companies among the nine census divisions.
Order books also vary from one regional division to another for the architectural and design services sector. Businesses in the East North Central division (including Wisconsin, Michigan, Illinois, Indiana and Ohio) reported 10-week backlogs, while the East South Central division (including Kentucky, Tennessee, Alabama and Mississippi) posted much shorter arrears at 4.7 weeks.
Compared to the same quarter a year ago, backlogs are longer in all nine census divisions.