Comments
2020 U.S. Houzz State of the Industry
Houzz Research
February 19, 2020
Findings from a survey of 3,094 U.S. residential renovation businesses on Houzz about 2019 and expectations for 2020
Download the Full Report
Businesses Maintain a Positive Outlook: More than half of residential renovation and design companies on Houzz predict that 2020 will be a good or very good year (65% to 82%), reflecting a slight increase from expectations for 2019 a year ago (58% to 80%). While businesses across the seven industry groups expect 2020 revenue growth to range from 4.2% to 9.1%, five of them have lowered their 2020 growth expectations by 0.5 to 1.3 percentage points compared with their 2019 growth expectations.
Product and Material Costs Are the Top Challenge: Following widespread increases to the costs of doing business in 2019 (55% to 78%), product and material costs are cited as the most significant cost driver by six of seven industry groups (compared with five of seven groups in 2018). A large share of companies link the rising costs to a negative impact of tariffs on businesses in 2019 (23% to 34%), with architects and design-build companies being most likely to cite a negative impact (34% of each). Businesses report a wide range of products and materials impacted by tariffs, from metal, steel and wood to cabinets, tile and quartz.
Improved Expectations for the National Economy: A positive outlook on the national economy is maintained by a greater share of businesses (15% to 23%) compared with 2019 (11% to 18%), while expectations of an economic decline are significantly less prevalent (24% to 43%) than last year (35% to 61%). The majority of companies across all industry groups (58% to 69%) are optimistic that the demand for their services will increase in 2020, and most expect no change in their local economies.
Many Expect to Hire in 2020, yet Fewer Hired in 2019: Many companies continue to expect labor availability and costs to worsen in 2020. Still, more than a third of general contracting, design-build and building and renovation specialty companies (35% to 38%) and a fifth of architectural and interior design companies (20% of each) expect to hire in 2020. Interestingly, a smaller share of companies across all industry groups hired in 2019 compared with the previous year.
Revenue Growth Notably Slowed in 2019: While revenues continued to increase in 2019 for all seven industry groups, six of them experienced a notable deceleration in average revenue growth (3.1% to 6.1%) compared with 2018 (5.6% to 8.2%). Building and renovation specialty companies are the exception, reporting an average revenue growth on par with 2018’s (6.1% in 2019 versus 6.5% in 2018).
Download the Full Report
See Related Stories:
Businesses Maintain a Positive Outlook: More than half of residential renovation and design companies on Houzz predict that 2020 will be a good or very good year (65% to 82%), reflecting a slight increase from expectations for 2019 a year ago (58% to 80%). While businesses across the seven industry groups expect 2020 revenue growth to range from 4.2% to 9.1%, five of them have lowered their 2020 growth expectations by 0.5 to 1.3 percentage points compared with their 2019 growth expectations.
Product and Material Costs Are the Top Challenge: Following widespread increases to the costs of doing business in 2019 (55% to 78%), product and material costs are cited as the most significant cost driver by six of seven industry groups (compared with five of seven groups in 2018). A large share of companies link the rising costs to a negative impact of tariffs on businesses in 2019 (23% to 34%), with architects and design-build companies being most likely to cite a negative impact (34% of each). Businesses report a wide range of products and materials impacted by tariffs, from metal, steel and wood to cabinets, tile and quartz.
Improved Expectations for the National Economy: A positive outlook on the national economy is maintained by a greater share of businesses (15% to 23%) compared with 2019 (11% to 18%), while expectations of an economic decline are significantly less prevalent (24% to 43%) than last year (35% to 61%). The majority of companies across all industry groups (58% to 69%) are optimistic that the demand for their services will increase in 2020, and most expect no change in their local economies.
Many Expect to Hire in 2020, yet Fewer Hired in 2019: Many companies continue to expect labor availability and costs to worsen in 2020. Still, more than a third of general contracting, design-build and building and renovation specialty companies (35% to 38%) and a fifth of architectural and interior design companies (20% of each) expect to hire in 2020. Interestingly, a smaller share of companies across all industry groups hired in 2019 compared with the previous year.
Revenue Growth Notably Slowed in 2019: While revenues continued to increase in 2019 for all seven industry groups, six of them experienced a notable deceleration in average revenue growth (3.1% to 6.1%) compared with 2018 (5.6% to 8.2%). Building and renovation specialty companies are the exception, reporting an average revenue growth on par with 2018’s (6.1% in 2019 versus 6.5% in 2018).
Download the Full Report
See Related Stories: