This year’s Houzz State of the Industry report delved into home renovation and design businesses’ projections for revenue and profit growth, hiring and business challenges for this year, and a summary of how their businesses performed last year. Houzz also released the Q4 2015 Renovation Barometer, a confidence-tracking index for the home renovation market’s interior designers, landscape professionals, builders/remodelers and others.
The findings? Key takeaways include:
Home renovation and design businesses on Houzz are predicting “more widespread revenue and profit growth” this year than in last, with half or more of those surveyed forecasting revenue growth rates of 10 percent or more.
Half or more firms plan to invest more in marketing (50-70 percent of firms across industry groups).
Over a third are planning to reel in larger-budget projects (39-54 percent of firms), increase their prices (37-49 percent of firms), and/or improve customer experience (35-47 percent of firms).
Some of the challenges named in the report include managing consumer concerns and expectations; a rise in business costs; and staffing shortages.
“All of our Houzz industry research to date points to an exceptional two-year run for the home renovation and design industry, leading to a healthy market in 2016,” said Nino Sitchinava, principal economist at Houzz. “2016 should bring more moderate but steady growth, driven by solid consumer demand but hampered by labor shortages. We expect to see businesses increasing their fees to offset rising labor costs and years of low margins, as well as focusing efforts on big-ticket projects while expanding their staff.”
The Houzz Renovation Barometer showed increased confidence, pinpointing “high year-over-year readings of 72 or higher across industry groups.” The Barometer also exceeded 70 points for all four quarters of 2015, further evidence of industry growth in 2015 relative to 2014. In terms of quarter-over-quarter readings, the Barometer posted scores of 58 or higher in Q4 2015. These scores are 8 to 11 percent lower than Q3 2015 scores for all industry groups except architects and interior designers, whose scores only declined by four and one percent.