Hardware Retailing The Industry's Source for Insights and Information
Houzz Inc. recently released its 2025 U.S. Houzz State of the Industry Report, detailing an outlook for 2025 performance in the residential construction and design businesses industries and a review of 2024 performance.
The study reports more than 3 out of 5 firms in the construction and design sectors expect a positive business outlook in 2025, with 60% of respondents architects and 73% specialty contractors.
This outlook brings optimism after a year of low profitability and revenue in 2024, caused by a decreased number of projects and smaller project budgets.
“Home professionals are entering 2025 with renewed confidence and expectations for growth in both revenue and profitability after navigating two difficult years,” says Marine Sargsyan, Houzz staff economist. “Pros report that they’ve implemented new processes for operational efficiency and client communication, and made strategic investments in technology to address the challenges they faced last year. This will better position them for an anticipated increase in demand, enhance their resilience amidst potential tariffs and leverage expected improvements in both local and national economic conditions.”
Initiating larger-budget projects, adjusting pricing structures and offering new products and services are strategies contractors and designers plan to implement to increase revenue growth this year. In 2025, general contractors are expected to see average growth of 11.3% and specialty contractors can expect average revenue increases of 12.4%. Architects, design-build firms, interior designers and landscaping and outdoor service firms expect to grow between 9.0% and 9.4%.
In 2024, architects, speciality contracts and design-build firms alike all invested in resources, such as new software to optimize areas like manage operations and automate workflows, to improve business operations.
As the year moves forward, respondents to this report predict a rise in product and material costs and continued labor shortages paired with improved local and national economies, providing more certainty and optimism for the year ahead.
