This press release is submitted and posted here in its original, unedited form by Furniture Today.
Palo Alto, California, July 19, 2022 – Houzz Inc., the leading home improvement and design platform, today released the Houzz Q3 2022 Renovation Barometer, which tracks home improvement market expectations, project delays and Recent activity by companies in the construction industry and the architectural and design services industry in the US Barometer, which went live from June 30 to July 11, 2022, provides timely information on the impact recent economic volatility in the home improvement market. While the majority of companies in the construction and architectural and design services sectors have reported more increases than decreases in recent business activity, expectations of continued demand are tempered as owners wait signs of national economic stability. Meanwhile, after record wait times before professionals can begin work on a new medium-sized project, companies are reporting that backlogs are shrinking across the industry.
“After the strong residential renovation and design activity of the past two years, it’s no surprise that companies are leveling their expectations as current economic conditions are now impacting both sides of the industry,” Marine said. Sargsyan, economist at Houzz. “Rising interest rates and inflation have put downward pressure on owners’ demand for short-term professional services, giving professionals an opportunity to clear long backlogs. That said, landlords managing the demands of an aging housing stock and shortages in the housing market will continue to drive home renovation and design activity over the long term.
Construction sector barometer Q3 2022
In the construction industry, build-only and design-build professionals are aligned with anticipated business performance and recent business activity. While project inquiries declined significantly in Q2 2022 among both business groups, both groups reduced their expectations for new committed projects in Q3 2022. Business activity is highest among New England businesses (69) and lowest among Pacific professionals. department (46).
- The expected business activity indicator related to project inquiries and new projects committed decreased to 62 in Q3 (from 67 in Q2). Expectations for project requests fell to 62 from 65 in the second quarter, and new projects committed were reduced to 63, down six points from expectations in the second quarter (69).
- The project backlog indicator is 10.5 weeks at the start of the third quarter, a return to wait times similar to a year ago after hitting a five-year high in the second quarter ( 12 weeks).
- The recent business activity indicator related to project inquiries and new projects committed fell to 63 in the second quarter. This reflects an eight point drop from the first quarter, but it is five points more than the same period before the pandemic (58 in the second quarter of 2019). This is due to a ten point drop in project requests in the second quarter compared to the previous quarter, and a decrease in the number of new projects committed to 65 (72 points compared to the first quarter of 2022).
Barometer of the architectural and design services sector Q3 2022
Business performance expectations diverge somewhat between the architectural and design services sub-sectors. While the expected activity indicator is down between the two activity groups, interior designers present a more optimistic view than architects. Both groups report slower business activity in the second quarter of 2022 compared to the previous quarter. Regionally, expectations for business activity are highest among businesses in the Center-Southeast division (61) and lowest among businesses in the Center-Northwest division (46) .
- The expected business activity indicator related to project applications and new projects committed fell to 52 in the third quarter, with interior designers at 68 points against architects at 42 points. This drop in the overall indicator is mainly due to the drop in expectations of new projects committed to 51 in Q3 (down 17 points compared to Q2). Expectations for project inquiries are also down 11 points in Q3 (52 vs. 63 in Q2).
- The project backlog indicator is 7.5 weeks at the start of Q3, slowly returning to wait times of a year ago (7.2 weeks in Q3 2021) after reaching the highest levels since 2017 in Q4 2021 (9.3 weeks) and slightly down from Q1 and Q2 2022 (7.9 weeks).
- The recent business activity indicator related to project requests and new projects committed fell to 56 in Q2 (vs. 63 in Q1 2022), with interior designers at 62 vs. architects at 53. This drop is the result of a drop in project requests to 55 (compared to 62 in Q1 2022) and a drop in new projects committed to 57 (down 6 points compared to Q1 2022).
For the construction sector, the New England division (comprising Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) has the longest backlog (13.8 weeks) driven primarily by construction companies only in the region (14.4 weeks), while design-build renovators report wait times of 13.3 weeks. Companies in the Mountain Division (which includes Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming) are reporting backlogs of 9.2 weeks before they can start a new project, the shortest wait time reported by construction companies among the nine census divisions. Compared to the same quarter a year ago, construction backlogs are longer in five of nine census divisions (East South Central, Middle Atlantic, Mountain, New England and West South Central divisions).
Order books also vary across regional divisions among companies in the architectural and design services sector. Businesses in the East North Central division (including Illinois, Indiana, Michigan, Ohio and Wisconsin) reported backlogs of 10.4 weeks, while the East South Central division (including l (Alabama, Kentucky, Mississippi and Tennessee) posted much shorter arrears at 6.3 weeks. Backlogs reported by architects (13.7 weeks) in the Central North East division are driving long wait times, while waiting times to start a new project with an interior designer in this region are only 4.9 weeks. Compared to the same quarter a year ago, backlogs in the architectural and design services industry are longer in five of nine census divisions (central-northeast, central-southeast, mountain , New England and Mid-Northwest).
Notes to Editors
The Houzz Renovation Barometer is based on a quarterly online survey sent to a national panel of businesses with an online profile on Houzz. The Barometer keeps the pulse of home improvement market conditions through three separate indices that track expected, current and recent business activity in two related industry sectors, the construction sector and the architectural and architectural services sector. design.
The expected business activity indicator is based on survey questions that ask businesses to indicate whether they expect the number of project requests and new projects started increase, decrease or remain unchanged in the next quarter from the previous quarter. Scores for each component are then calculated as seasonally adjusted diffusion indices on a scale of 0 to 100, with index values above 50 indicating that a greater proportion of companies reported one-quarter increases to the other than those reporting declines.
The recent business activity indicator is based on survey questions that ask businesses to indicate whether they have observed the actual number of project requests and new projects started increase, decrease or remain unchanged in the most recent quarter compared to the previous quarter. The scores for each component are then calculated as seasonally adjusted diffusion indices similar to the expected business activity indicator. Recent business activity indicator scores can be compared to expected business activity indicator scores for a given quarter to see if actual activity met, exceeded or fell short of expectations.
Finally, the Backlog indicator is based on survey questions that ask companies to report wait times in weeks before a company can begin work on a new medium-sized project. Scores are calculated as average wait times without seasonal adjustment.
The three indices are calculated individually for two sub-sectors of the construction sector (construction only renovators and design and construction renovators) and for two sub-sectors of the architectural and design services sector (architects and designers of interior), as well as for nine regions that follow the United States. Census Bureau Divisions. Aggregate national indices are calculated using industry subsector weights and regional weights derived from the 2016 U.S. Census County Business Models Survey. The detailed methodology and underlying quarterly indices for the construction industry and the architectural and design services industry, as well as other information on market conditions, can be found at houzz.com/research.
The 2022 Q3 Barometer was conducted from June 30 to July 11, 2022 and garnered responses from over 1,000 home improvement companies on Houzz. n=1151.
Houzz is the leading home improvement and home design platform, giving people everything they need to improve their home from start to finish. On Houzz, people can find design inspiration, find and hire home professionals, and shop for products to complete their projects. For home professionals, Houzz Pro (houzz.com/pro) provides an all-in-one software solution that enables industry professionals to stand out, win clients, and manage their projects efficiently and effectively. profitable. The Houzz community is made up of millions of homeowners, interior design enthusiasts, and home improvement professionals around the world. Houzz is available on the web and as a premium mobile app. Houzz is a registered trademark of Houzz Inc. worldwide. For more information, visit houzz.com.