Home improvement contractors remain cautiously optimistic

"Even as higher material costs, labor constraints, economic uncertainty, and spottier consumer spending trends weigh on current renovation and remodeling projects, home improvement contractors remain optimistic. The Q4 Contractor Activity Tracker, released by The Farnsworth Group and Home Improvement Research Institute, concluded that confidence among home improvement contractors is relatively unchanged from a year ago. The index surveyed five categories of residential contractors: remodel, exterior, mechanical, finish, and landscaping. Generally speaking, exterior contractors were the least optimistic, while mechanical contractors were the most confident."

"Overall, contractors are confident in their company's ability to get business over the next six months, averaging 8.3 out of 10, up slightly from a year ago. Mechanical pros were the most confident at 8.9, while exterior pros ranked last at 7.8. The index found that 65% of contractors expect revenue to increase over the next year, down 4% annually. Mechanical pros were once again the most confident, while exterior pros were the least optimistic."

"Labor availability remains an issue. While contractors have a relatively high confidence (7.7) in labor availability, a slight majority of contractors report having trouble hiring skilled laborers over the past year. Contractors also, in general, believe that labor costs will have a moderate impact on their business over the next 12 months. Most of the contractors surveyed reported that the average revenue per project improved over the past year."

Higher material costs, labor constraints, economic uncertainty, and spottier consumer spending weigh on current renovation and remodeling projects. Confidence among home improvement contractors remains relatively unchanged from a year ago. Contractors averaged 8.3 out of 10 confidence in their ability to get business over the next six months, with mechanical contractors at 8.9 and exterior contractors at 7.8. Sixty-five percent of contractors expect revenue to increase over the next year, while 55% reported revenue growth over the past 12 months. Labor availability is a concern: contractors rate confidence in availability at 7.7 but a slight majority reported difficulty hiring skilled labor. Mechanical contractors reported higher revenue per project and the busiest workloads, while exterior contractors reported the lowest quantity and quality of leads.

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