Palo Alto, Calif. — Construction businesses have tempered their positive outlook for expect business activity in the second quarter from last quarter’s peak, according to the recently released Q2 2022 Houzz Renovation Barometer.
The barometer, based on a quarterly only survey of businesses with an online profile on Houzz, tracks residential renovation market expectations, project backlogs and recent activity among U.S. businesses in the construction sector and the architectural and design services sector.
While architecture and design professionals remain confident about their business outlook, this has softened slightly, with expectations declining somewhat for project inquiries and new committed projects. Backlogs reached three months for construction professionals and nearly two months for architecture and design professionals.
“While business activity and the confidence in demand for construction and design services has been the strongest we’ve seen in the last four quarters, industry professionals are cautious about expected Q2 performance,” said Marine Sargsyan, Houzz staff economist. “Pros anticipate some impact on project inquiries due to inflation, supply chain delays and rising costs for materials, such as lumber, aluminum and even gasoline. Lengthy backlogs persist into Q2 however, signaling continued home renovation and design activity.”
Highlights from the report:
- In the construction industry, build-only and design-build professionals are aligned on anticipated business performance. Build-only remodelers report stronger activity compared with Q4 2021, while design-build firms experienced a slight decrease in Q1 2022 activity compared with the previous quarter.
- Interior designers expressed optimism for business in Q2, reporting higher expectations than last quarter for new committed projects. Architects have tempered their outlook, anticipating decreases in project inquiries and new committed projects. Both groups report slower business activity in Q1 2022 compared to the previous quarter.
- Backlogs continue to grow across the industry, with the time before pros can begin work on a new, mid-sized project lengthening further across the country. In fact, wait times are the longest when compared with the start of any year since 2018. Backlogs vary significantly by geography, but are longer in Q2 2022 than they were in Q2 2021 across all nine Census divisions in the U.S.
The Q2 2022 Barometer was fielded March 27-April 7 and garnered responses from more than 1,000 home improvement firms on Houzz.