Wallisch, Sean

Remodelers, design-build contractors, and architects are generally bullish on market conditions and expect continued growth this year, Houzz reports in its 2018 State of the Industry Survey.

Remodeling writer Sean Wallisch presents some of the report's key findings:

Market Optimism
A total of 404 architects, 809 remodelers, and 415 design-build firms registered with Houzz were polled between November 2017 and January 2018. The majority of firms have a positive outlook for 2018; 72% of firms in all three categories said it will either be a "good" or "very good" year. The remodeling industry was particularly optimistic, as 36% of remodelers and 42% of design build firms said it will be a "very bood" year.

Architects Show Caution
Architecture firms were the most conservative industry group polled throughout the survey, predicting just 6.9% revenue growth compared with remodelers (10.5%) and design-build firms (9.9%). Additionally, when it came to expected profit growth, 56% of architects expected profits to increase compared with 72% of remodelers and design-build firms.

2017 vs. 2018
But this year's growth won't top last year's, all three groups predict. General contractors reported an average 10.6% rise in sales in 2017 and count on a 10.5% increase this year. Design-build firms grew more last year, up 11.1%, but think they'll gain only 9.9% in 2018. (Both the general contractors and design-build firms grew faster than the top 300 full-service firms on the soon-to-be-published Remodeling 550 list. That group's revenues rose 7.4%.) Meanwhile, architects said their business increased 8.2% in 2017 but will grow just 6.9% this year.

Business Costs Rising
While revenues and profits are expected to grow, firms also see input costs getting more expensive. Expected labor availability, labor costs, and materials costs are all projected to get worse. Fifty-three percent of remodelers and 52% of design-build firms see labor availability getting worse, and at least half the firms from all three industries expect labor costs to rise. The same can be said for expectations of materials costs, but remodelers and design-build firms are even more pessimistic. On this front, 60% of remodelers and 59% of design-build firms say materials costs are going up.

Read More