Hardware Retailing The Industry's Source for Insights and Information
New data from home renovation and design platform Houzz suggests the home improvement market has recovered to pre-pandemic activity levels, reporting the strongest construction activity since the third quarter of 2018.
“The results from the Houzz Q4 Renovation Barometer show that the home remodeling and design industry is truly resilient, and is seeing business activity return to pre-pandemic levels,” says Marine Sargsyan, Houzz senior economist. “Home professionals have a positive outlook through the end of the year, despite unprecedented uncertainty due to the pandemic and the upcoming election, increasing supply chain constraints as well as shortages in the labor market.”
The quarterly Houzz Renovation Barometer tracks expectations for the residential renovation market, project backlogs and recent activity among U.S. construction firms and the architectural and design service sectors. The latest report surveyed nearly 1,700 home improvement firms between Sept. 24-Oct. 7, providing a sharply current look at home improvement activity.
Analyzing Construction and Design
On the construction side, the Recent Business Activity Indicator related to project inquiries and new committed projects grew substantially to 73 points in the fourth-quarter of 2020. Houzz’s data shows this spike is driven mainly by an increase in project inquiries and by an increase in new committed projects. Houzz’s Project Backlog Indicator increased to 7.2 weeks in the fourth quarter, two weeks longer than in the same period of 2019.
Architectural and design services companies showed similar strength. This sector’s uptick in project inquiries and new committed projects increased in the third quarter and remains high. The Project Backlog Indicator holds steady at 4.5 weeks, about 0.4 weeks longer than one year ago. However, the Expected Business Activity Indicator related to project inquiries and new committed projects fells to 62 points, down 5 points from the third quarter. Still, the results show a greater proportion of firms reporting quarter-over-quarter increases than those reporting decreases.
New Steps to Succeed
Many home improvement pros are taking new steps to reach customers amid COVID-19 concerns and shifting customer preferences.
“Pros are taking on new clients remotely using online tools and collaboration platforms, continuing the momentum from the recent quarter,” Sargsyan says.
More than half of architecture and design firms have offered video consultations during the pandemic. About one-third of construction pros have used video consultation tools and 31 percent have sourced more products online, Houzz data shows.
In total, 85 percent of architectural and design service firms and 87 percent of construction firms have a neutral to very good outlook for the rest of 2020, compared to 73 percent and 82 percent, respectively, in the third quarter.
