Apr 13, 2016 - Many companies are offering on-the-job training or publicizing job ... and design-build firms responding
Q1 2016 HOUZZ RENOVATION BAROMETER April 2016
© 2016 Houzz Inc.
Big Ideas • The Houzz Renovation Barometer, which tracks industry optimism in year-over-year and quarter-over-quarter market improvements, posted high Q1 readings across all industry groups (68-75 out of 100), reflecting widespread industry confidence in quarter-over-quarter market gains. The readings for Q1 2016 are in line with the Q1 2015 results for most industry groups. Outlook is rosy for Q2 2016. • The Barometer posted high year-over-year readings of 70-78 in the first quarter of 2016, which is roughly in line with scores for Q4 2015 (72-76). While confidence in year-over-year market gains continues to be high, four of the six industry groups report somewhat weaker scores in Q1 2016 relative to the confidence scores in Q1 2015. • Consistent with past Barometer findings, nearly four in five remodelers and design-build firms report moderate to severe shortages of skilled trades and general laborers, with finish carpenters being in the shortest supply. Three in four businesses reporting labor shortages are hiring in those in-demand trades. Shortages are most severe in the Midwest. • Many companies are offering on-the-job training or publicizing job opportunities on social media to attract young workers to the industry. Some are taking more extensive measures, such as partnering with local colleges or other companies to offer training programs or giving talks at local colleges or high schools.
U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Contents Current Labor Conditions
4-7
Q1 Houzz Renovation Barometer: Quarter Over Quarter
8-11
Q1 Houzz Renovation Barometer: Year Over Year
12-15
Methodology & Appendix
16-19
U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
CURRENT LABOR CONDITIONS
U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Carpenters & General Labor in Short Supply Consistent with past Barometer findings, nearly four in five general contractors (GCs), remodelers and design-build firms report moderate to severe labor shortages across a wide range of skilled trades, with finish carpenters in shortest supply (see Appendix to compare to Q3 2015). Three in four companies reporting shortages are trying to hire employees and/or subcontractors from these in-demand trades. MODERATE TO SEVERE LABOR SHORTAGES BY PRO TYPE REPORTED BY GCS, REMODELERS, DESIGN-BUILD FIRMS* Carpenter (finish) Laborer (general) Framer Tiler Plumber Drywaller Mason Electrician Concrete specialist Painter Cabinet specialist Roofer Flooring specialist Siding specialist HVAC specialist Other
45%
Pros currently hiring trades that are in short supply**
39% 27% 22% 19% 19% 19% 19% 18% 17% 17% 13% 13% 13% 11% 9%
18%
Hiring employees only
38%
Hiring subcontractors only
20%
Hiring both
24%
Not currently hiring
77% vs. 79% Q1 2016 VS. Q3 2015 Pros reporting moderate to severe labor shortages*
*Percentages reflect proportion of GCs, remodelers and design-build firms responding to the Q1 2016 Barometer survey. **Percentages reflect proportion of GCs, remodelers and design-build firms who reported moderate to severe shortages of specialized trades and general laborers. U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Midwestern Labor Woes While firms report widespread labor shortages across all regions, Midwestern GCs, remodelers and design-build firms are under the most pressure. Nearly nine in ten Midwestern firms report shortages of skilled trades and general laborers (85%), while Northeastern firms are the least affected (72%). Midwestern firms are 50% or more likely to be short on general laborers and framing, tile, drywall, concrete and flooring trades than their Northeastern peers. MODERATE TO SEVERE TRADES/LABOR SHORTAGES REPORTED BY GCS, REMODELERS, DESIGN-BUILD FIRMS* Overall Labor Shortages by Region
Labor Shortages by Pro Type & Region** Carpenter (finish) Laborer (general) Framer Tiler Plumber Drywaller Mason Electrician Concrete specialist Painter Cabinet specialist Roofer Flooring specialist Siding specialist HVAC specialist Other
85%
78% 76% 72%
Northeast
Midwest
South
West
Northeast 46% 32% 19% 17% 18% 12% 15% 14% 10% 17% 16% 13% 10% 13% 12% 6%
Midwest 50% 47% 32% 29% 18% 22% 19% 18% 19% 17% 13% 16% 16% 14% 10% 4%
South 45% 38% 29% 22% 23% 21% 25% 21% 21% 19% 17% 12% 13% 12% 9% 6%
West 43% 41% 30% 24% 19% 20% 16% 21% 18% 17% 20% 14% 13% 12% 12% 10%
*Percentages reflect proportion of GCs, remodelers and design-build firms who reported moderate to severe shortages of specialized trades and general laborers. **Percentages reflect proportion of GCs, remodelers and design-build firms responding to the Q1 2016 Barometer survey. U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Many Offer On-the-Job Training To attract young workers to the industry, over a third of GCs, remodelers and design-build firms are offering on-the-job training for recent hires (39%). One in five leverages social media to publicize job opportunities for young workers (21%). Some are taking more extensive measures, such as partnering with local colleges or other companies (8% and 4%, respectively) to offer training programs, and giving talks at local colleges or high schools (6% and 6%, respectively).
ACTIONS TO ATTRACT YOUNG WORKERS REPORTED BY GCS, REMODELERS, DESIGN-BUILD FIRMS* Northeast Midwest
Nationally 39%
Offer on-the-job training for recent hires
21%
Leverage social media to spread awareness of job opportunities
South
West
45%
42%
35%
37%
25%
24%
22%
15%
Partner with local colleges/universities to offer training programs
8%
7%
9%
10%
6%
Attend recruiting events organized by others
8%
10%
9%
7%
7%
Give talks at local colleges/universities
6%
5%
6%
6%
5%
Give talks at local high schools
6%
7%
7%
4%
5%
Partner with other companies to offer training programs
4%
5%
3%
4%
2%
Host or help organize my company's recruiting events
3%
3%
5%
4%
2%
Run local newspaper ads about job opportunities in my industry
3%
4%
4%
2%
2%
Offer to pay for student loans of recent hires
1%
1%
0%
2%
1%
Run local TV ads about job opportunities in my industry
1%
1%
1%
0%
0%
6%
6%
11%
6%
Other
7%
*Percentages reflect proportion of GCs, remodelers and design-build firms who reported moderate to severe shortages of specialized trades and general laborers.
U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
HOUZZ RENOVATION BAROMETER QUARTER OVER QUARTER
U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Spring Fever Is Back The Houzz Renovation Barometer posted readings of 68-75 in the first quarter of 2016 (Jan.-Mar.), which are 6%-10% higher for architects and designers, 14%-17% higher for GCs/remodelers and design-build firms, and 9%-26% higher for specialty firms than Q4 2015 scores. The readings for Q1 2016 are in line with scores for the same quarter in 2015, with the exception of architects and outdoor specialty firms, which report somewhat weaker confidence in Q1 2016. Outlook is rosy for Q2.
HOUZZ RENOVATION BAROMETER (QUARTER OVER QUARTER)* Designers Architects
Design-Build GCs/Remodelers
Specialty: Landscape/Outdoor Specialty: Building/Renovation 86 86
84 82 79 77 75 72
73
73 70
69
65
64
72 70
69
68
67 66
78 75
73 70
82
78 78
77
74
73 72
73
71 68
66 64
62
65
65
66
61 58
Q4 '14
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2E '16
Q4 '14
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2E '16
Q4 '14
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q2E '16
*Q2E reflects expectations for the upcoming quarter.
*A reading over 50 indicates that more firms are reporting business activity is higher than those reporting it is lower in a given quarter relative to the prior quarter. The greater the index value relative to 50, the greater the proportion of firms reporting increases in quarterly business activity than those reporting decreases. Business activity is measured as number of inquiries, number of new projects/orders and size of new projects/orders. U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
High Expectations for Q2 The majority of firms report quarter-over-quarter increases in the number of inquiries and the number and size of new projects in the first quarter of 2016, as reflected in Barometer readings of 73-79, 69-75 and 62-71, respectively. Expectations for quarter-over-quarter gains in Q2 are sky-high across all new business metrics, in particular among GCs and remodelers, building/renovation specialty firms and outdoor specialty firms.
COMPONENTS OF HOUZZ RENOVATION BAROMETER (QUARTER OVER QUARTER)* Architects
Designers GCs & Remodelers Design-Build
Specialty:
Specialty:
Building/Renovation Landscape/Outdoor
NO. OF INQUIRIES 78
74
67 64
73
77
76
72 69 65 73
81
79 79
74
78
76
72 67 63 69
77
75 76
SIZE OF NEW PROJECTS/ORDERS
71
68 68
73
75
66 64 60 59 62 65
67
Q1 Q2 Q3 Q4 Q1 Q2E ’15 ’15 ’15 ’15 ’16 ’16
Q1 Q2 Q3 Q4 Q1 Q2E ’15 ’15 ’15 ’15 ’16 ’16
66 66 65
75
80
82
87
74
70 73 69
78
66
NO. OF NEW PROJECTS/ORDERS 82
86
65
77
74
79 64
70
Q1 Q2 Q3 Q4 Q1 Q2E ’15 ’15 ’15 ’15 ’16 ’16
72
72 64
79
89
84
73
69 64
76 68 65
75
71
72
76
Q1 Q2 Q3 Q4 Q1 Q2E ’15 ’15 ’15 ’15 ’16 ’16
74
67
80
76
63 54
89
84
81
79
68
80
73
74
80
67 72
65 68
Q1 Q2 Q3 Q4 Q1 Q2E ’15 ’15 ’15 ’15 ’16 ’16
73
76
90
84 66
79
69
91
84
75 57
79
79 66 63 68
Q1 Q2 Q3 Q4 Q1 Q2E ’15 ’15 ’15 ’15 ’16 ’16
*See footnote on p. 9 for interpretation of the scores. The Houzz Renovation Barometer is a simple average of the scores of the three components. U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Weaker Confidence Among Western Firms Across nearly all industry groups, Western firms are reporting somewhat weaker confidence in quarter-over-quarter improvements in Q1 2016 relative to the same period in 2015 (67-73 vs. 72-84), likely due to rainier weather conditions in the early months of 2016.
REGIONAL HOUZZ RENOVATION BAROMETER (QUARTER OVER QUARTER)* Architects
Designers
GCs & Remodelers
Design-Build
Specialty:
Specialty:
Building/Renovation
Landscape/Outdoor
NORTHEAST 69 69 64 63 69 71
73 69 68 64 67
79
70
77
69 59
73
84
77 77 72
63
77
83
78 63
91
88 69 69 71
68
89 58 51 64
MIDWEST 74 69 65 58
75 78
70 71 66 67 69 75
82
85
75 70
62 71
75 78 73
75
79 78
67 60
76
85
74 72 70 65 68
85
91
88 73
62 55
72
SOUTH 72 71 68 64 64 66
72 76 69 67 71
76 72
74 76
84
66
85
75 79
65 69
74
80
71
79 75
68
74
84
82 83
79 82 65 68
WEST 65 62 67
73
Q1 Q2 Q3 Q4 Q1 Q2E
’15 ’15 ’15 ’15 ’16 ’16
66 67
72
79
Q1 Q2 Q3 Q4 Q1 Q2E
’15 ’15 ’15 ’15 ’16 ’16
77 77 75
68
73
82
Q1 Q2 Q3 Q4 Q1 Q2E
’15 ’15 ’15 ’15 ’16 ’16
76 78 75
65
73
80
Q1 Q2 Q3 Q4 Q1 Q2E
’15 ’15 ’15 ’15 ’16 ’16
77 73 72
86 63
72
Q1 Q2 Q3 Q4 Q1 Q2E
’15 ’15 ’15 ’15 ’16 ’16
84
77
84 69
73 56
Q1 Q2 Q3 Q4 Q1 Q2E
’15 ’15 ’15 ’15 ’16 ’16
*Click on the links to see the Houzz Renovation Barometer by state and by major metro area. See footnote on p. 9 for interpretation of the scores. U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
HOUZZ RENOVATION BAROMETER YEAR OVER YEAR
U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Year-Over-Year Gains Continue The Barometer posted high year-over-year readings of 70-78 in the first quarter of 2016, which is in line with the results for Q4 2015 (72-76). While confidence in year-over-year market gains continues to be high, four of the six industry groups report somewhat weaker scores in Q1 2016 relative to the confidence scores in Q1 2015 (72 vs. 74 for designers, 70 vs. 76 for architects, 75 vs. 79 for design-build firms and 74 vs. 77 for building/renovation specialty firms, respectively).
HOUZZ RENOVATION BAROMETER (YEAR OVER YEAR)* Designers Architects
Design-Build GCs/Remodelers
Specialty: Landscape/Outdoor Specialty Building/Renovation 83
76
76
74
74
76 75
75 74
73 72
79
79
77
76
80
80
79 78
78 76
80
75
80
79 77
77
78 75 75
77
76
72
79
74
70
Q4 '14
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q4 '14
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
Q4 '14
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16
*A reading over 50 indicates that more firms are reporting business activity is higher than those reporting it is lower in a given quarter relative to the same quarter of the prior year. The greater the index value relative to 50, the greater the proportion of firms reporting increases in quarterly business activity than those reporting decreases. Business activity is measured as number of inquiries, number of new projects/orders and size of new projects/orders. U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Strong Year-Over-Year Gains in All Business Metrics Confidence across all three new business activity metrics continues to bolster year-over-year Barometer scores. Across all sectors, firms report widespread year-over-year increases in inquiries and the number and size of new projects in Q1 2016.
COMPONENTS OF HOUZZ RENOVATION BAROMETER (YEAR OVER YEAR)* Architects
Designers
GCs & Remodelers Design-Build
Specialty:
Specialty:
Building/Renovation Landscape/Outdoor
NO. OF INQUIRIES 81 78 78
NO. OF NEW PROJECTS/ORDERS
74 73
79 78 78 75
71
SIZE OF NEW PROJECTS/ORDERS 68 70 69 67 65 Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
76 77 75 74 74
76 76 76 75 72
70
74
71 72 70
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
81 82 81 79 81
76
71
82
78 76 79
77 75 74 75
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
82 81 80 77 78
78 81 78 76 77
80
80 82 79
78 81 79 75 75
79
74 75 75 73
72
75 76
76 77 77 76
73
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
70
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
86
86
81
75
80 77
80
81
78 76 74 74
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
*See footnote on p. 13 for interpretation of the scores. The Houzz Renovation Barometer is a simple average of the scores of the three components. U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Some Northeastern Sectors See a Boost in Confidence Industry confidence in year-over-year market gains is largely consistent across regions. Northeastern GCs & remodelers, building/renovation specialty firms and landscape/outdoor specialty firms all report an uptick in confidence in year-overyear market gains in Q1 2016 relative to the Barometer scores for Q1 2015 (78 vs. 71 for GCs & remodelers, 74 vs. 72 for building/renovation specialty firms and 76 vs. 68 for landscape/outdoor specialty firms, respectively).
REGIONAL HOUZZ RENOVATION BAROMETER (YEAR OVER YEAR)* Architects
Designers
GCs & Remodelers
Design-Build
Specialty:
Specialty:
Building/Renovation
Landscape/Outdoor
NORTHEAST
MIDWEST
SOUTH
WEST
80 76 77 79 77
79 75 74 74 72
68
76 76 76
85 81
78
73
83 79 77 76
71 73 74 71 67
72 73 74 71 68
77 77 78
65 71
72 71 76 70 70
79 80
69 71 72 69
74 78 72 74 72
76
80 80 77 75 72
76 77 75 76 75
79 80 82 78 77
78 82 81 74 73
76 78 79 77 76
Q1 Q2 Q3 Q4 Q1
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
75
’15 ’15 ’15 ’15 ’16
86
78 71 79 75 71
73
78 79
81 78 76 79
75
75 76 78
80 79 77 75
73 73 73 70
79 82 79
74 75
81 82
75 77
81 83 83
83
74 78
Q1 Q2 Q3 Q4 Q1 ’15 ’15 ’15 ’15 ’16
*Click on the links to see the Houzz Renovation Barometer by state and by major metro area. See footnote on p. 13 for interpretation of the scores. U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
METHODOLOGY & APPENDIX
U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Methodology The Houzz Renovation Barometer tracks quarterly fluctuations in business activity related to renovation of owner-occupied existing homes. The study is conducted quarterly and presents an analysis of responses to an online survey sent out to a national U.S. panel of architects, interior designers, general contractors/remodelers, design-build firms, and building/renovation and landscape/outdoor specialties. The Houzz Renovation Barometer survey for the current quarter was fielded March 29 - April 13, 2016. N = 3,316 (419 architects; 679 interior and building designers; 797 general contractors/remodelers; 470 design-build firms; 638 building/ renovation specialties;1 and 313 landscape/outdoor specialties2). Index Construction Method: The Houzz Renovation Barometer survey asks professionals to indicate whether certain business activities increased, decreased or stayed about the same in a given quarter; changes in activity are measured quarter over quarter and year over year. “Business activity” refers to number of inquiries, number of new projects/orders and average size of new projects/orders. The final Houzz Renovation Barometer is constructed as a diffusion index that 1) sums up the proportion of firms reporting increases in a given business activity and one-half of the proportion of firms reporting no change in the activity; and 2) averages the sums across the three components, with equal weights assigned to each component. Diffusion indices are a widely accepted method for tracking turning points in the market. For more information on the methodology, see U.S. Houzz Barometer Study, February 2015.
Building/renovation specialties include replacement contractors (e.g., carpenters) and product installers/manufacturers/resellers (e.g., cabinetry). Landscape/outdoor specialties include landscape architects, designers and contractors; outdoor replacement trades (pavers); and outdoor product installers/manufacturers/resellers (e.g., pools and spas). 1
2
U.S. Houzz Renovation Barometer | April 2016
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© 2016 Houzz Inc.
Links to Pros on Houzz 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. Design, Renovation & Building
Products for the Home
Remodeling Services & Supplies
Outside the Home
Architects & Building Designers
Appliances
Building Supplies
Backyard Courts
Design-Build Firms
Bedding & Bath
Cabinets & Cabinetry
Decks, Patios & Outdoor Enclosures
General Contractors
Carpet & Flooring
Carpenters
Driveways & Paving
Home Builders
Fireplaces
Closet Designers & Professional Organizers
Fencing & Gates
Interior Designers & Decorators
Furniture & Accessories
Kitchen & Bath Fixtures
Garden & Landscape Supplies
Kitchen & Bath Designers
Lighting
Paint & Wall Coverings
Lawn & Sprinklers
Kitchen & Bath Remodelers
Furniture Refinishing & Upholstery
Rubbish Removal
Outdoor Lighting & Audio Visual Systems
Landscape Architects & Landscape Designers
Window Treatments
Specialty Contractors
Outdoor Play Systems
Landscape Contractors
Pools & Spas
Stone, Pavers & Concrete
Tree Services
Tile, Stone & Countertops
Windows, Doors, Roofing & Siding
Other Contractors & Services
Home Service Contractors
Doors
Artists & Artisans
Electrical Contractors
Garage Doors
Home Media Design & Installation
Environmental Services & Restoration
Roofing & Gutters
Home Stagers
HVAC Contractors
Siding & Exterior Contractors
Ironwork
Plumbing Contractors
Windows
Kids & Nursery
Septic Tanks & Systems
Media & Bloggers
Solar Energy Contractors
Photographers
Real Estate Agents
Schools & Organizations
Staircases & Railings
Wine Cellars
U.S. Houzz Barometer Highlights | April 2016
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© 2016 Houzz Inc.
Findings from Q3 2015 Houzz Renovation Barometer [click here for the link]
Shortage of Building/Renovation Trades & General Labor Consistent with past Barometer findings, GCs, remodelers and design-build firms that specialize in home renovations report moderate-to-severe labor shortages across a wide range of specialized trades. Carpenters are reported to be in the shortest supply across the U.S. (cited by 45% of firms), followed by framers (25%), tile (22%), and drywall (21%). Over a third of firms (36%) also report moderate-to-severe shortages of general laborers. In general, trade/labor shortages appear to be most prevalent in the Midwest and least prevalent in the Northeast.
MODERATE-TO-SEVERE TRADES/LABOR SHORTAGES REPORTED BY GCS, REMODELERS, DESIGN-BUILD Nationally
Northeast Midwest
Carpenter (finish)
45%
Laborer (general)
36%
Framer
25% 22%
Tile Drywall
21%
South
West
Carpenter (finish)
43%
54%
39%
46%
Laborer (general)
25%
43%
36%
37%
Framer
15%
33%
23%
29%
Tile
18%
22%
18%
28%
Drywall
15%
22%
18%
25%
Concrete
19%
Concrete
10%
22%
23%
19%
Plumber
19%
Plumber
15%
19%
18%
22%
Masonry
19%
Masonry
14%
17%
22%
19%
Electrician
19%
Electrician
12%
21%
16%
25%
Painter
18%
Painter
11%
20%
19%
21%
Cabinetry
18%
Cabinetry
11%
22%
17%
20%
Flooring
11%
Flooring
9%
14%
8%
13%
HVAC
10%
HVAC
11%
8%
10%
12%
Roofer
10%
Roofer
8%
11%
8%
14%
Siding
10%
Siding
8%
14%
9%
10%
Other
5%
8%
5%
7%
Other
6%
U.S. Houzz Renovation Barometer | October 2015
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© 2016 Houzz Inc.
