PALO ALTO, Calif. — Houzz Inc., a global platform for home remodeling and design, reports optimism for 2022 following strong 2021 results with revenue growth at a four year high across the industry, outpacing expectations for the year.
In the 2022 Houzz U.S. State of the Industry report released today, Houzz offers an outlook on 2022 and review of 2021 performance for residential renovation and design businesses based on data reported by more than 2,800 professionals in the Houzz community.
Companies across all industry sectors have a confident outlook for 2022, with more than two-thirds anticipating this will be a good or very good year and that demand for their services will continue to increase.
“Following a busy year for the home renovation and design industry, the findings from the Houzz State of the Industry show that professionals are bullish that momentum will continue through 2022,” said Marine Sargsyan, Houzz senior economist. “The positive outlook is prevalent across industry groups from architects and designers to builders and landscapers, despite headwinds in the form of labor and product availability and price volatility.”
Confidence in 2022: The majority of residential construction and design companies on Houzz predict that 2022 will be a good or very good year (ranging from 71% of building and renovation firms to 77% for architects). For the first time since 2018, architects have the most positive outlook among the seven sectors surveyed.
Revenue growth surpassed expectations in 2021: In 2021, businesses reported their highest year-over-year revenue growth in the past four years, with groups ranging for an estimated 9% to 12% revenue growth. Businesses across all industry groups anticipate continued growth in 2022 of 5% to 9%.
Increased demand anticipated: More companies across all seven industry groups (ranging from 41% to 54%) believe that demand for their services will increase in 2022, with interior designers the most confident that demand for their services will improve (54%).
Hiring is on the rise: Design-build firms were the most likely to hire in 2021 (34%), followed by general contractors, builders and remodelers (28%) and landscaping and outdoor firms (27 ). Hiring is expected to continue across all industry groups in 2022.
Labor shortages impact cost: Companies across all industry groups expect labor availability to worsen in 2022, which affects the cost of labor. In fact, companies across all seven industry groups also expect labor costs to increase in 2022, with construction businesses are particularly concerned.
Price volatility and availability of products and materials top challenges: All industry groups listed price volatility of products and materials as one of their top challenges. Availability of products and materials is among the top challenges by six of the seven industry groups, and more than half of companies across the seven industry groups expect product and material costs to rise (53% to 72%).
The complete 2022 Houzz U.S. State of the Industry report can be found here.
The Houzz U.S. State of the Industry was conducted among more than 2,800 home renovation firms in the Houzz U.S. community that offer services related primarily to residential renovation and/or design. Companies were grouped into seven industry sectors including, architects, interior designers, general contractors and remodelers, design-build firms, building and renovation specialty firms, landscape and outdoor specialty firms, and decorating specialty firms. The study was fielded from Dec. 30, 2021, to Jan. 26.