Eight in 10 home-improvement professionals expect to see revenues grow in the next year, while more than half (55.8%) reported an increase in per-project revenue last year, according to a new index from HomeAdvisor and the Farnsworth Group.
The quarterly HomeAdvisor Farnsworth Index tracks the repair and remodeling industry across 13 categories, including remodeling, kitchen and bath specialists, roofing contractors and drywall installers, on topics including revenue potential, lead generation and skilled-labor availability.
More than half (53.6%) of the 1,744 pros surveyed nationwide in February said they faced challenges finding skilled labor in the last year. The share of remodeling (59%) and landscaping (57.1%) companies saying the same was slightly above the survey average.
Remodeling spending surged to its highest-recorded level in 2016 at $361 billion, according to Harvard University's Joint Center for Housing Studies, with spending in the category expected to grow 2% annually through 2025. Meanwhile, remodelers saw their average net profit margins grow to 5.3% in 2015 from 3% in 2011, according to a recent report by the National Association of Home Builders.
A slowdown in demand for repair and remodeling services could be ahead, however, with the NAHB’s latest Remodeling Market Index dropping four points between the third and fourth quarters of 2016. Still, the index hasn't shown a contraction in demand for 15-consecutive quarters, and analysts are confident in the market segment as home prices rise and more owners choose to invest in their existing properties instead of trading up.
Landscaping continues to be an area in which homeowners are investing. A recent Houzz survey found that owners want to differentiate their front yards and add outdoor living space in the back. Lighting was the most popular outdoor upgrade, with 45% of respondents recently investing in such a project. Outdoor kitchens are also popular, with 10% of respondents to the Houzz survey saying they recently added a grill and either built-in cabinets, a sink and/or a refrigerator.
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