The Q1 2019 Houzz Renovation Barometer, which tracks residential renovation market expectations, project backlogs, and recent activity among businesses in the construction industry, points to mixed expectations for home renovation activity, according to a press release from the company.
The Renovation Barometer is based on a quarterly online survey sent to a national panel of businesses with an online profile on Houzz. The Barometer keeps pulse on the market through the Expected Business Activity Indicator Index, the Backlog Indicator Index, and the Recent Business Activity Indicator Index.
In the construction sector, the Expected Business Activity Indicator related to project inquiries and new projects decreased seven points from the final quarter of 2018. Additionally, the Recent Business Activity Indicator related to project inquiries and new projects decreased four points from the previous quarter. The Project Backlog Indicator increased slightly to 4.8 weeks nationally. However, the overall backlog for the sector is nearly 2 weeks below year-over-year levels.
For architects and designers, the Expected Business Activity Indicator was almost unchanged from the previous quarter, while the Recent Business Activity Indicator was up five points from the previous quarter. The Project Backlog Indicator decreased nearly a half of a week to 4.7 weeks for the sector. However, the overall backlog for the sector is up slightly on a year-over-year basis.
"Current Barometer readings and qualitative feedback reflect a mixed degree of caution about the market conditions among contractors, architects, and designers," Houzz principal economist Nino Sitchinava said. "It is notable that, relative to a year ago, expectations and recent activity among contractors are more subdued and project backlogs are considerably higher."
Sitchinava said businesses cited the rising costs of products and materials as a reason for subdued recent activity. The higher costs of projects have led to customer reluctance in proceeding with projects, according to respondents.
All three Houzz indices are based on survey questions asked to businesses and are computed for the nine U.S. Census regions in addition to national estimates. The national indices are computed using industry subsector weights and regional weights derived from the 2016 U.S. Census County Business Patterns survey.