Labor Shortages Drive Higher Project Costs and Longer Timelines for Homeowners
October 18, 2016
Houzz Inc. released the Q3 2016 Houzz Renovation Barometer, which tracks confidence in the home renovation market among industry professionals. According to the survey, labor shortages continue to be a challenge, with nearly four in five remodelers and design-build firms reporting moderate to severe labor shortages of skilled trades and general laborers. Half of general contractors, remodelers and design-build firms report this shortage is driving increases in costs to hire subcontractors (53 percent), while a third report higher costs due to an increase in compensation for their own employees (37 percent).
“The sustained growth in consumer demand for residential remodeling services, as indicated by the Houzz Renovation Barometer, is naturally driving prices for remodeling services up. Yet, with systematic labor shortages and no major shift in labor conditions expected in the near term, consumers will continue to experience significant increases in project costs and difficulty finding qualified remodelers,” says Nino Sitchinava, principal economist at Houzz. “At the same time, remodelers will continue to be squeezed to do more with less, be more selective about the nature of projects they take on and be more cautious about committing to project cost and timeline estimates.”
Year-over-year Barometer readings were high for the third quarter of 2016 (64-77), indicating optimism in continued year-over-year gains in the home renovation market. For GCs, remodelers and design-build firms, confidence held or slightly increased, relative to Q2 2016. Readings increased six percent for designers, but decreased four percent for architects.
The full Q3 2016 Houzz Renovation Barometer can be found here.