Firms Focus on Clients and Talent Amid Industry Headwinds

Pros adjust pricing, hiring and communication strategies, the Q2 2026 U.S. Houzz Pro Industry Barometer shows

Mitchell ParkerApril 14, 2026

Houzz Editorial Staff. Home design journalist writing about cool spaces, innovative trends, breaking news, industry analysis and humor.

The quarterly U.S. Houzz Pro Industry Barometer surveys nearly 1,000 construction and architecture and design firms on Houzz about their expected, current and recent business activity. The Q2 2026 Barometer also examines how firms are responding to rising cost pressures, intensifying competition and ongoing labor shortages.

The latest report finds that business activity softened across both sectors in the first quarter of 2026. Even so, professionals enter Q2 with cautious optimism, as construction firms signal early signs of a rebound and design firms maintain a steady outlook despite sharper recent declines in project inquiries.

Against this backdrop, firms are increasingly focused on three key areas: managing rising costs and economic uncertainty, strengthening client relationships to stay competitive and evolving recruitment strategies to address persistent labor shortages. Here’s a closer look at how construction and design businesses are adapting.

1. Rising Costs and Uncertainty Weigh on Q2 Outlook

Cost pressures and broader economic uncertainty remain top concerns for construction and design professionals heading into the second quarter.
Nearly half of firms cite rising costs of products and materials as a key challenge (49% construction, 45% design).

Broader macroeconomic concerns also persist, particularly among design firms:

Geopolitical uncertainty (23% construction, 30% design)
Tariffs (17% construction, 30% design)

Client hesitation continues to affect project timelines, with more than a quarter of firms reporting homeowners are delaying project starts (27% construction, 30% design).

In construction, labor constraints remain especially pronounced, with more than two-thirds of firms (67%) reporting skilled labor shortages.

Pros Expect Q2 Rebound After Softer Start to 2026

Curated Nest

2. Firms Focus on Client Experience to Stay Competitive

As competition intensifies, professionals are prioritizing client communication and experience to win and retain projects. Improving client communication is the most widely adopted strategy across both sectors, cited by 60% of construction firms and 45% of design firms.

Other approaches include:

Adjusting pricing or offering promotions (42% construction, 19% design)

Construction firms are more likely to rely on pricing strategies to secure work, while design firms continue to emphasize experience-driven differentiation and branding.

See how Houzz Pro can help you find customers, manage projects and grow your business

3. Recruitment Strategies Evolve Amid Labor Shortages

Ongoing labor constraints are pushing firms to rethink how they attract and retain talent. More than half of construction firms are investing in on-the-job training programs (57%), while design firms are more likely to pursue academic partnerships (26%).

Both sectors are expanding digital recruiting efforts:

Social media recruiting (35% construction, 36% design)
Highlighting use of advanced technology — AI, project management tools like Houzz Pro (10% construction, 16% design)

These strategies reflect a broader effort to reach younger, tech-savvy talent while addressing long-term workforce gaps.

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