Houzz, a platform for home remodeling and design, released the Q4 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, in the United States. The Barometer points to strong expectations for home renovation market activity in the fourth quarter of the year.
“It is promising that expectations in the construction sector bounced back up from some of the lowest that we’ve seen last quarter. The architectural and design sector outlook also remains strong despite a mild quarter-over-quarter dip,” said Nino Sitchinava, Houzz principal economist. “That said, project backlogs in both sectors remain significantly below year-over-year levels, indicating that the renovation activity in the last three months was not strong enough to offset the lackluster first half of the year. Businesses report that labor shortages, a shortened renovation season and continued weather disruptions, in addition to rising product costs and economic uncertainty, are contributing to project delays and a shift toward smaller projects.”
Construction sector
• The Expected Business Activity Indicator related to project inquiries and new committed projects increased to 74 in Q4 (up four points relative to Q3). The increase is a result of an increase in expectations for project inquiries (up ten points to 78 in Q4) and a slight decline in new committed projects (down one point to 70 in Q4).
• The Project Backlog Indicator increased to 5.2 weeks in Q4 relative to Q3 (4.9 weeks). Wait times are 1.1 weeks shorter than a year ago.
• The Recent Business Activity Indicator related to project inquiries and new committed projects increased to 63 in Q3 (up five points points relative to Q2). This follows an increase in project inquiries to 67 in Q3 (up eleven points relative to Q2), and only a slight increase in new committed projects to 60 compared to Q2 (up one point).
Architectural and design services sector
• The Expected Business Activity Indicator related to project inquiries and new committed projects decreased to 67 in Q4 (down four points relative to Q3). Expectations decreased for both project inquiries (down three points to 67 in Q4) and for new committed projects (down five points to 67 in Q4).
• The Project Backlog Indicator declined to 4.1 weeks in Q4 relative to Q3 (4.7 weeks). Wait times are a week shorter than a year ago.
• The Recent Business Activity Indicator related to project inquiries and new committed projects declined to 57 in Q3 (down six points relative to Q2). The decline is a result of a decrease in project inquiries to 57 (down four points in Q2) and a decrease in new committed projects to 57 (down seven points relative to Q2).
