Press Info
< Back

Company News

January 10, 2019
Q1 Expectations are Mixed Among Renovation Professionals, Houzz Barometer Finds
Project backlogs hold steady at five weeks for construction and architectural and design services sectors


Houzz Inc., the leading platform for home remodeling and design, today released the Q1 2019 Houzz Renovation Barometer, which tracks residential renovation market expectations, project backlogs and recent activity among businesses in the construction sector and the architectural and design services sector. The Barometer points to mixed expectations for home renovation market activity in the first quarter of the year.

“Current Barometer readings and qualitative feedback reflect a mixed degree of caution about market conditions among contractors, architects and designers,” said Nino Sitchinava, Houzz principal economist. “It is notable that, relative to a year ago, expectations and recent activity among contractors are more subdued and project backlogs are considerably lighter. In contrast, the sentiments and backlogs of architects and designers are on par with a year ago, likely explained by a boost in new business activity in the last quarter of 2018. That said, businesses overwhelmingly cite rising costs of products and materials and customers’ reluctance to proceed with the projects due to these costs.”

Construction Sector

  • The Expected Business Activity Indicator related to project inquiries and new projects decreased to 72 in Q1 (down seven points relative to Q4). The decline follows decreases in both components, with expectations for project inquiries falling to 72 in Q1 (down seven points), and expectations for new projects also decreasing to 72 (down seven points).
  • The Project Backlog Indicator slightly increased to 4.8 weeks nationally in Q1 (up 0.3 weeks relative to Q4). That said, overall backlog for the construction sector is 1.7 weeks below year-over-year levels.
  • The Recent Business Activity Indicator related to project inquiries and new projects decreased to 67 in Q4 (down four points relative to Q3). The decline follows a decrease in both project inquiry activity, which fell to 67 in Q4 (down six points), and recent new projects activity, which decreased to 66 (down three points).

Architectural and Design Services Sector
  • The Expected Business Activity Indicator related to project inquiries and new projects remained nearly unchanged at 65 in Q1 (up one point relative to Q4). Expectations for project inquiries were at 64 (up one point) and expectations for new projects remained at 65.
  • The Project Backlog Indicator slightly decreased to 4.7 weeks nationally in Q1 (down 0.4 weeks relative to Q4). The overall backlog for the architectural and design services sector is 0.2 weeks below year-over year levels.
  • The Recent Business Activity Indicator related to both project inquiries and new projects increased to 65 in Q4 (up five points relative to Q3). The uptick follows an increase in both recent project inquiry activity, which increased to 65 in Q4 (up three points), and recent new project activity, which increased to 65 (up seven points).

Notes to Editors
The Houzz Renovation Barometer is based on a quarterly online survey sent to a national U.S. panel of businesses with an online profile on Houzz. The Barometer keeps a pulse on home renovation market conditions via three distinct indices that track expected, current, and recent business activity in two related industry sectors, the construction sector and the architectural and design services sector.

The Expected Business Activity Indicator is based on survey questions that ask businesses to report whether they expect the number of project inquiries and new projects to increase, decrease or stay unchanged in the upcoming quarter relative to the prior quarter. Scores for each component are then computed as a seasonally adjusted diffusion indices on a scale of 0 to 100, with index values over 50 indicating that a greater proportion of firms reported quarter-over-quarter increases than those reporting decreases.

The Recent Business Activity Indicator is based on survey questions that ask businesses to report whether they observed the actual number of project inquiries and new projects increasing, decreasing or staying unchanged in the most recent quarter relative to the prior quarter. Scores for each component are then computed as a seasonally adjusted diffusion indices similar to the Expected Business Activity Indicator. Recent Business Activity Indicator scores can be compared to the Expected Business Activity Indicator scores for any given quarter to see whether actual activity met, exceeded, or fell short of expectations.

Finally, the Backlog Indicator is based on survey questions that ask businesses to report wait times in weeks before a company can start work on a new midsize project. Scores are computed as average wait times without a seasonal adjustment.

All three indices are computed individually for three subsectors in the construction sector (build only remodelers, design and build remodelers, and specialty trade contractors) and for two subsectors in the architectural and design services sector (architects and interior designers), as well as for nine regions that follow U.S. Census Bureau Divisions. The aggregated national indices are computed using industry subsector weights and regional weights derived from the 2016 U.S. Census County Business Patterns survey. Detailed methodology and underlying quarterly indices for the construction sector and the architectural and design services sector, and other information on market conditions can be found on houzz.com/research.

The Q1 2019 Barometer was fielded December 27th through January 9th and garnered responses from more than 2,200 small businesses on Houzz. n=2,270.

The Q2 2019 Houzz Renovation Barometer release date is April 11, 2019.

About Houzz

Houzz is the leading platform for home remodeling and design, providing people with everything they need to improve their homes from start to finish – online or from a mobile device. From decorating a small room to building a custom home and everything in between, Houzz connects millions of homeowners, home design enthusiasts and home improvement professionals across the country and around the world. With the largest residential design database in the world and a vibrant community empowered by technology, Houzz is the easiest way for people to find inspiration, get advice, buy products and hire the professionals they need to help turn their ideas into reality. Headquartered in Palo Alto, Calif., Houzz also has international offices in London, Berlin, Sydney, Moscow, Tel Aviv and Tokyo. Houzz is a registered trademark of Houzz Inc. worldwide. For more information, visit houzz.com.