PALO, ALTO, CA — Companies across all sectors of the residential renovation and design trade “have a confident outlook for 2022,” with more than two-thirds anticipating this will be a good or very good year, and that demand for their services will continue to increase.
That is the key conclusion of the 2022 Houzz U.S. State of the Industry report, released today by Houzz Inc., Palo Alto, CA-based online platform for home renovation and design. The report provides an outlook for 2022 and a review of 2021 performance for businesses based on data reported by more than 2,800 professionals in the Houzz community.
“Following a busy year for the home renovation and design industry, the findings from the ‘Houzz State of the Industry’ show that professionals are bullish that momentum will continue through 2022,” said Houzz senior economist Marine Sargsyan. The positive outlook, Sargsyan added, is prevalent across industry groups from architects and designers to builders and landscapers, “despite headwinds in the form of labor and product availability and price volatility.”
Accumulated home equity and other industry fundamentals continue to drive demand for improvements to aging housing stock, as well as upgrades “that will enable homeowners to stay in their homes long into retirement years,” Sargsyan observed.
Among the key findings of Houzz’s report were:
n Confidence in 2022: The majority of residential construction and design companies on Houzz predict that 2022 will be a good (71%) or very good (77%) year.
n Revenue growth surpassed expectations in 2021: In 2021, businesses reported their highest year-over-year revenue growth in the last four years, with five out of seven groups reporting double-digit revenue growth. Three quarters of companies across all business sectors reported that revenue growth was at or above their initial expectations for 2021. Businesses across all industry groups anticipate continued growth in 2022 of five to nine percent.
n Increased demand anticipated: More companies across all seven industry groups believe that demand for their services will increase in 2022, rather than decrease
n Hiring is on the rise: More residential renovation and design companies hired employees in 2021 than in 2020. Design-build firms were the most likely to hire in 2021, followed by general contractors, builders and remodelers. Hiring is expected to continue across all industry groups in 2022.
n Labor shortages impact cost: Companies across all industry groups expect labor availability to worsen in 2022, increasing the cost of labor. Construction businesses are particularly concerned.
n Price volatility and availability of products and materials top challenges: All industry groups listed price volatility of products and materials as a top challenge, with more than half of surveyed companies expecting product and material costs to rise this year.
The Houzz U.S. State of the Industry study was fielded from Dec. 30, 2021 to Jan. 26, 2022, the company said.