Remodelers and contractors maintain generally positive outlooks about the future market for business, according to GuildQuality’s 2020 First Quarter Market Predictions report. The amount of respondents who believed the market would “decline” or “significantly decline” in the first quarter of 2020 dipped to 4%, the lowest percentage since the third quarter of 2018. The percentage had been above 10% since the fourth quarter of 2018.
Conversely, 40% of respondents to the GuildQuality survey predicted the market would “improve” or “significantly improve” in the first quarter, a jump of nearly 15% from the GuildQuality survey in the fourth quarter of 2019.
Survey respondents also reported more confidence in their company’s expected performance for the first quarter than in recent quarters. Seventy-five percent of respondents predicted their company’s performance would “improve” or “significantly improve” in the first quarter, a 14% increase from the third quarter of 2019. The percentage of companies predicting performance would “decline” or significantly decline” dipped to 2% in the first quarter of 2020. Despite the uptick in expectations for company performance in the first quarter, GuildQuality noted this is consistent with patterns observed dating back to 2009. The first quarter has historically had the highest number of companies predicting company performance would “improve” or “significantly improve” than any other quarter in a given year.
In addition to being optimistic about the future, businesses also hold generally positive views of current market conditions. In the Q1 2020 survey, 87% of respondents reported feeling “good” or “excellent” about today’s market, a 4% increase year over year. Respondents reporting feeling “poor” or “horrible” about the current state of the market remained low at 1.5%.
The GuildQuality report is based on its Market Predictions Survey, sent out to the organizations membership of over 2,500 home builders, remodelers, and contractors. In addition to asking businesses about the current and future state of the market, the survey also polls respondents about the availability of qualified labor.
Over one-third of respondents reported the availability of qualified labor was “poor” or “horrible,” with only a quarter reporting market conditions for labor as “good” or “excellent.” Over 70% of respondents indicated the availability of qualified labor has not changed in the past six months, while 19% of respondents indicated the availability has declined or significantly declined in the same time period. The negative responses towards the change in availability of skilled labor in the previous six months are the lowest total reported since GuildQuality introduced the question in 2018. Firms reported recruiting, better training to reduce turnover, and more performance tracking among their most important near-term strategies.
Respondents were also asked about trends they saw more and less of during their work in the fourth quarter of 2019. The results suggested remodelers are seeing more color used in cabinetry and tiling, more black used in window trim, railings, and exterior settings, and a greater adoption of smart home technology. Respondents reported seeing fewer stand-alone tubs, hardwood floors, and all-gray rooms.
