Houzz study: Renovation market showing strongest activity since Q3 2018
October 21, 2020 | 11:44 am CDT
PALO ALTO, Calif. - According to the latest Houzz Renovation Barometer for Q4 2020, businesses have recovered to pre-pandemic activity levels, and the construction sector is reporting its strongest business activity since Q3 2018, the company said.
“The results from the Houzz Q4 Barometer show that the home remodeling and design industry is truly resilient, and is seeing business activity return to pre-pandemic levels,” said 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. Pros are taking on new clients remotely using online tools and collaboration platforms, continuing the momentum from the recent quarter.”
Q4 2020 Construction Sector barometer
- The Recent Business Activity Indicator related to project inquiries and new committed projects increased substantially to 75 in Q3 (compared to 49 in Q2). This is driven by an increase in project inquiries, which grew to 75 in Q3 (up 24 points relative to Q2), and by an increase in new committed projects to 75 (up 19 points relative to Q2).
- The Project Backlog Indicator increased to 7.2 weeks in Q4 relative to Q3, which is two weeks longer than a year ago.
- The Expected Business Activity Indicator related to project inquiries and new committed projects remained high, though it decreased slightly to 73 in Q4 (compared to 75 in Q3). Expectations for project inquiries are down to 71 compared to 79 in Q3 and new committed projects increased to 75 (up four points relative to Q3).
Q4 2020 Architectural and Design Services Sector barometer
- The Recent Business Activity Indicator related to project inquiries and new committed projects increased to 61 in Q3 (compared to 48 in Q2). This is driven by a growth in project inquiries to 60 (up seven points in Q3 relative to Q2), and an increase in new committed projects to 62 (up 19 points relative to Q2).
- The Project Backlog Indicator remained steady at 4.5 weeks in Q4, which is 0.4 weeks longer than a year ago.
- The Expected Business Activity Indicator related to project inquiries and new committed projects decreased to 62 in Q4 (compared to 67 in Q3). Expectations also decreased for project inquiries to 62 and for new committed projects to 61 in Q4. The results show a greater proportion of firms reported quarter-over-quarter increases than those reporting decreases.
COVID-19’s influence on home renovation and design businesses
Architecture and design firms responded to pandemic-related business challenges by offering video consultations, implementing safety guidelines at the office and worksite, providing remote collaboration tools and sourcing more products online (56, 49, 48 and 46 percent, respectively). Construction businesses implemented new safety guidelines, utilized video consultation tools and sourced more products online (60, 33 and 31 percent, respectively). One third of businesses in the architectural and design services sector and more than a quarter of businesses in the construction sector also adopted online invoicing and payments (36 and 26 percent, respectively). Many of these solutions are supported by Houzz Pro business and project management software.
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