Activity, Confidence Reported Up Among Remodeling Firms
PALO ALTO, CA — Residential construction professionals experienced their busiest quarter since at least 2015 in the first three months of 2021, with confidence among remodeling construction and design firms running high into the third quarter, according to Houzz Inc.
The Palo Alto, CA-based online platform for home remodeling and design, reported positive results for its “Q3 2021 Houzz Renovation Barometer,” a quarterly gauge of residential renovation market expectations, project backlogs and recent activity among businesses in the U.S. construction, architectural and design services sectors.
“The residential construction and design industry has continued to thrive under strong demand,” said Marine Sargsyan, Houzz senior economist. “In fact, our Expected Business Activity indicators are at some of the highest levels we’ve seen across both sectors since we began tracking the Barometer.”
However, the heightened activity is not without its challenges, according to Houzz, which reported that supply chain delays, extreme weather patterns, rising product and material costs and labor shortages “continue to create major headwinds for the industry.” Specifically, more than nine in ten construction businesses report labor shortages, including carpenters, laborers, framers, cabinet specialists and plumbers, Sargsyan said.
More than three quarters of businesses in both the construction and architectural and design services sectors report that product and material shortages and costs impacted their businesses in the second quarter of 2021, while more than half of firms in both sectors report labor shortages and costs impacted their businesses, she added.
In other findings:
n More than nine in 10 businesses across all business sectors reported increases in costs for lumber, copper, steel and aluminum in Q2, although about half of surveyed businesses do not believe that costs will continue to increase in Q3. Additional materials that construction pros anticipate rising in cost include plastic, concrete, paint, foam and drywall. Interior designers anticipate increased third-quarter prices for appliances, furniture and cabinetry.
n More than nine in 10 construction businesses (92%) report moderate to severe skilled labor shortages in Q3, with carpenters, laborers, framers, cabinet specialists and plumbers in particularly short supply. Forty percent of pros report shortages in cabinet specialists, up from 21% in 2019. Shortages for plumbers, painters, framers, concrete specialists and flooring specialists, saw a nine-percentage-point or more increase from 2019, as well, Houzz said.
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