Palo Alto, Calif.—The Q3 2015 Houzz Renovation Barometer reveals that optimism in quarter-over-quarter market improvements remains high across industry professionals, with high index scores of 65 or higher in market confidence. However, readings for Q3 of 2015 are six to 11 percent lower than readings from Q2 across all industry groups. Landscape specialty firms are the exception, having reported a decrease of 21 percent, likely due to seasonal patterns.
Hiring remains a top challenge for renovation professionals across industry sectors in Q3. General contractors, remodelers and design-build firms report that carpenters are in the shortest supply across the U.S. (cited by 45 percent of firms), followed by framers (25 percent), tile (22 percent) and drywall specialists (21 percent). Interestingly, more than one in five architects and interior designers report shortages of general contractors (24 and 21 percent respectively). Labor shortages are reported to be most prevalent in the Midwest and least severe in the Northeast.
“Barometer readings consistently show year-over-year gains in the past three quarters of 2015, pointing to healthy improvements in the remodeling industry in 2015 over 2014,” says Nino Sitchinava, principal economist at Houzz. “The headwins slowing overall industry performance are widespread labor shortages, particularly in the Midwest.”
Additional findings from the Q3 2015 Houzz Barometer include:
- Firms report growth across the number of new business inquiries as well as the number and size of new projects in Q3. Readings are down slightly from Q2 across all three leading new business indicators, likely due to the start of seasonal slowdown and the backlog of projects from the springs months among other factors.
- Widespread year-over-year improvements continued across all industry groups in Q3 2015, relative to the same period in 2014.
- While outdoor specialty firms are feeling the seasonal slowdown earlier than other industry groups, Northeastern and Midwestern outdoor firms are hit the hardest, as reflected by the 36 and 30 percent quarter-over-quarter decreases in the Barometer scores for the third quarter. Meanwhile, outdoor firms in the South and West saw significantly lower decreases (21 and 10 percent respectively).
- Over two-thirds of firms are reporting that gross revenues and profits so far this year are at or above levels they considered to be normal before the recent recession. Furthermore, a fifth to quarter of firms are reporting that revenues and profits are significantly above the normal levels, while a quarter to a third are reporting that they are somewhat above normal.
The full Houzz Renovation Barometer Q3 2015 report can be found here.