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Home Improvement and the Economy

Home improvement professionals saw increases in both project size and revenue per project over the…

  • September 13, 2018

Home improvement professionals saw increases in both project size and revenue per project over the past 12 months and remain confident in their ability to grow their businesses over the next year, according to new data from digital marketplace HomeAdvisor in the latest HomeAdvisor Farnsworth Index.

This is a good sign the economy is strong. Confident homeowners invest in home improvement, while jitters about the economy cause homeowners to hold off on projects.

“Home improvement is booming and business owners in this sector expect that to continue,” said Brad Hunter, chief economist for HomeAdvisor.  “Our index shows 80 percent of the businesses surveyed expect to see revenue growth in the next 12 months, with exterior contractors – siding, roofing, doors and windows – most bullish of all. Meanwhile, higher home values continue to give homeowners the power and confidence to invest in their homes.”

“We are entering a critical time to observe contractor sentiment,” said Grant Farnsworth, Partner at The Farnsworth Group. “With labor challenges remaining, material costs continuing to rise and the unknown of tariff implications, contractors are on the front lines of feeling the effects of these market conditions.  The HomeAdvisor/Farnsworth Index is an important industry measure to understand if, when and how these effects are impacting their business.”

Key Highlights from the Index:

  • All home pro groups surveyed are confident in their ability to get new business in the next six months, with exterior contractors (siding, roofing, doors and windows) the most confident of all.  Landscapers were the only group that was less confident than a year ago, but are still optimistic.
  • Pros expect their companies’ revenue to increase in the next 12 months  — most expect revenue growth of up to 20 percent.
  • Revenue per project is on the rise: most pros indicated their average revenue per project increased up to 10 percent.
  • The labor shortage impact is real and growing. More than half the pros surveyed reported they experienced challenges hiring for jobs. If not for the labor shortage, the companies surveyed estimated they could increase their revenue up to 20 percent.

The HomeAdvisor Farnsworth Index is a quarterly survey of home professionals and small businesses across 13 home services professions and serves as a barometer of the health of the home improvement industry.

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