A Houzz metric shows tempered optimism
The Houzz Renovation Barometer falls short of 2018 levels.
The weather, tax refunds and consumer confidence all factor into the second quarter 2019 Houzz Renovation Barometer, which tracks residential renovation market expectations. The results show a slowdown from a year ago, and also optimism among professional remodelers
The Barometer, also measures project backlogs and recent activity among businesses in the construction sector and the architectural and design services sector in the U.S. According to Houzz, it points to optimism among home renovation professionals for business activity in the second quarter of the year.
“This year’s residential renovation activity is already looking very different from 2018. Professional sentiments for the first quarter were considerably more tempered and businesses are starting the second quarter with much shorter backlogs relative to a year ago,” said Nino Sitchinava, Houzz principal economist. “Home professionals attribute the slowdown to unusually cold and wet weather conditions, in addition to consumer apprehension caused by the government shutdown, tax refund uncertainty, and the high costs of products and materials. Despite many of these concerns, the business outlook for the next three months is upbeat, with many anticipating an increased demand for exterior upgrades necessitated by winter storms.”
For the Construction Sector:
- The Expected Business Activity Indicator related to project inquiries and new committed projects increased to 74 in Q2 (up two points relative to Q1). The increase is a result of an uptick in expectations for both project inquiries (up two points to 74 in Q2) and new committed projects (up one point to 73 in Q2).
- The Project Backlog Indicator increased to 5.0 weeks (up 0.2 weeks) in Q2 relative to Q1. That said, it is 4.8 weeks less than a year ago.
- The Recent Business Activity Indicator related to project inquiries and new committed projects remained unchanged at 67 for Q1. This follows a decline in project inquiries to 66 in Q4 (down one point), and an increase in new committed projects to 67 in Q4 (up one point).
For the Architectural and Design Services Sector:
- The Expected Business Activity Indicator related to project inquiries and new committed projects increased to 70 in Q2 (up five points relative to Q1). Expectations increased for both project inquiries (up three points to 67 in Q2) and new committed projects (up seven points to 72 in Q2).
- The Project Backlog Indicator remained steady at 4.7 weeks in Q2, 1.4 weeks less than last year (6.1 weeks at the start of Q2 2018).
- The Recent Business Activity Indicator related to project inquiries and new committed projects decreased to 63 in Q1 (down two points relative to Q4).
The Q2 2019 Barometer was fielded March 28th through April 10th and garnered responses from more than 2,000 small businesses.
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