Houzz released its 2020 U.S. State of the Industry, which found that home renovation professionals, including landscape and outdoor specialty firms, have a positive outlook for business in 2020, despite challenges to labor availability and rising costs of doing business.
More than half of residential renovation and design companies on Houzz predict that 2020 will be a good or very good year (65% to 82%), reflecting a slight increase from expectations for 2019 a year ago (58% to 80%).
A positive outlook on the national economy is shared by a greater share of businesses (15% to 23%) compared to 2019 (11% to 18%), while expectations of an economic decline are significantly less prevalent (24% to 43%) than last year (35% to 61%).
Many expect to hire in 2020, yet fewer hired in 2019: Many companies continue to expect labor availability and costs to worsen in 2020. Still, more than a third of general contracting, design-build and building and renovation specialty companies (35% to 38%) and a fifth of architectural and interior design companies (20%, each) expect to hire in 2020.
Following widespread increases to the costs of doing business in 2019 (55% to 78%), products and materials are cited as the most significant cost driver. Rising costs are linked to a negative impact of tariffs on businesses in 2019 (23% to 34%) and include a range of products and materials from metal, steel and wood to cabinets, tile, and quartz.
“The findings from this year’s Houzz State of the Industry show continued momentum for the industry in its tenth year of expansion,” said Nino Sitchinava, Houzz principal economist. “While revenue growth slowed notably in 2019 and businesses expect continued growth deceleration into 2020, the positive outlook is prevalent across all industry groups and even improved when it comes to the health of the national economy. A major headwind in 2019 was rising costs of products and materials, linked by many businesses to increased tariff actions levied against popular construction products and materials. Elevated costs of products and labor continue to be the top challenges facing businesses going into 2020.”