2020 Kicks Off with Confidence in Q1 Home Renovation Market, Houzz Barometer Finds – Furniture World Magazine

Houzz Inc., the platform for home remodeling and design, recently released the Q1 2020 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 in the U.S. The Barometer points to strong expectations for home renovation market activity in the first quarter of the year.

Small businesses in the construction sector and architectural and design sector are heading into 2020 on a positive note, with expectations in line with last year and project backlogs already a few days longer than three months ago, said Nino Sitchinava, Houzz principal economist. Given the significant delays in 2019 due to weather, among other factors, businesses are optimistic about projects spilling over into the first half of 2020. Economic and political uncertainty, high product and material costs, and shortages of skilled labor continue to be the top cited concerns for 2020.

Construction Sector

Architectural and Design Services Sector

The Houzz Renovation Barometer is based on a quarterly online survey sent to a national 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 committed 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 committed 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 two subsectors in the construction sector (build only remodelers and design and build remodelers) 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 2020 Barometer was fielded December 29th, 2019 through January 10th, 2020 and garnered responses from nearly 1,500 small businesses on Houzz. n=1,484.

The Q2 2020 Houzz Renovation Barometer release date is April 9, 2020.

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2020 Kicks Off with Confidence in Q1 Home Renovation Market, Houzz Barometer Finds - Furniture World Magazine