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Confidence in 2022: The majority of residential construction and design companies surveyed1 (71% to 77%) predict that 2022 will be a good or very good year. For the first time since 2018, architects have the most positive outlook, with nearly 4 in 5 expecting a good or very good year (77%). They’re followed closely by general contractors (73%), design-build companies (73%), and specialty building and renovation firms (71%).
Hiring Is on the Rise: More residential renovation and design companies (18% to 34%) hired employees in 2021 than in 2020 (9% to 24%). Design-build firms were the most likely to hire in 2021 (34%), followed by general contractors, builders and remodelers (28%), and landscaping and outdoor firms (27%). The hiring trend is expected to continue across all industry groups in 2022, with 18% to 40% of firms expecting to add employees.
Higher Demand Anticipated: More companies across all seven industry groups (41% to 54%) believe that demand for their services will increase in 2022, rather than decrease (6% to 11%). Interior designers are the most confident that demand for their services will increase (54%).
Top Challenges: Price Volatility and Availability of Products and Materials: All industry groups cite price volatility of products and materials as one of their top challenges. Availability of products and materials also is among the top challenges for 6 of the 7 industry groups. General contractors, design-build firms, and building and renovation specialists cite price volatility (47% to 55%) and availability of products and materials (37% to 40%) as the leading challenges they faced in 2021, followed unsurprisingly by an increased cost of doing business (28% to 35%). More than half of companies (53% to 72%) across the seven industry groups expect product and material costs to rise in 2022.
Revenue Growth Surpassed Expectations in 2021: Businesses reported the highest year-over-year revenue growth of the previous four years in 2021. Revenue growth rates were 9% to 12%, with 5 of the 7 industry groups reporting growth percentages in the double digits. For three-quarters of companies (71% to 77%) across all sectors, 2021 revenue growth was at or above their initial expectations. Businesses across all industry groups anticipate continued growth of 5% to 9% in 2022.
Labor Shortages Impact Cost: More companies across all industry groups expect labor availability to worsen this year than those who did in 2021 (41% to 55% in 2022 versus 34% to 45% in 2021). Construction businesses are particularly concerned. The percentages of general contractors, design-build companies, and building and renovation specialists expecting labor availability to worsen in 2022 have increased by 11, 10 and 11 points, respectively, compared with expectations a year ago. And as shortages affect the cost of labor, more companies across all seven industry groups (49% to 64%) expect labor costs to increase in 2022 compared with those who expected it a year ago (42% to 52%).
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Confidence in 2022: The majority of residential construction and design companies surveyed1 (71% to 77%) predict that 2022 will be a good or very good year. For the first time since 2018, architects have the most positive outlook, with nearly 4 in 5 expecting a good or very good year (77%). They’re followed closely by general contractors (73%), design-build companies (73%), and specialty building and renovation firms (71%).
Hiring Is on the Rise: More residential renovation and design companies (18% to 34%) hired employees in 2021 than in 2020 (9% to 24%). Design-build firms were the most likely to hire in 2021 (34%), followed by general contractors, builders and remodelers (28%), and landscaping and outdoor firms (27%). The hiring trend is expected to continue across all industry groups in 2022, with 18% to 40% of firms expecting to add employees.
Higher Demand Anticipated: More companies across all seven industry groups (41% to 54%) believe that demand for their services will increase in 2022, rather than decrease (6% to 11%). Interior designers are the most confident that demand for their services will increase (54%).
Top Challenges: Price Volatility and Availability of Products and Materials: All industry groups cite price volatility of products and materials as one of their top challenges. Availability of products and materials also is among the top challenges for 6 of the 7 industry groups. General contractors, design-build firms, and building and renovation specialists cite price volatility (47% to 55%) and availability of products and materials (37% to 40%) as the leading challenges they faced in 2021, followed unsurprisingly by an increased cost of doing business (28% to 35%). More than half of companies (53% to 72%) across the seven industry groups expect product and material costs to rise in 2022.
Revenue Growth Surpassed Expectations in 2021: Businesses reported the highest year-over-year revenue growth of the previous four years in 2021. Revenue growth rates were 9% to 12%, with 5 of the 7 industry groups reporting growth percentages in the double digits. For three-quarters of companies (71% to 77%) across all sectors, 2021 revenue growth was at or above their initial expectations. Businesses across all industry groups anticipate continued growth of 5% to 9% in 2022.
Labor Shortages Impact Cost: More companies across all industry groups expect labor availability to worsen this year than those who did in 2021 (41% to 55% in 2022 versus 34% to 45% in 2021). Construction businesses are particularly concerned. The percentages of general contractors, design-build companies, and building and renovation specialists expecting labor availability to worsen in 2022 have increased by 11, 10 and 11 points, respectively, compared with expectations a year ago. And as shortages affect the cost of labor, more companies across all seven industry groups (49% to 64%) expect labor costs to increase in 2022 compared with those who expected it a year ago (42% to 52%).
Download the Full Report
See Related Stories: