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The quarterly U.S. Houzz Pro Industry Barometer surveys nearly 1,000 construction and architecture and design firms on Houzz about their expected, current and recent business activity. The Q2 2026 Barometer also examines how firms are responding to rising cost pressures, intensifying competition and ongoing labor shortages.

The latest report finds that business activity softened across both sectors in the first quarter of 2026. Even so, professionals enter Q2 with cautious optimism, as construction firms signal early signs of a rebound and design firms maintain a steady outlook despite sharper recent declines in project inquiries.

Against this backdrop, firms are increasingly focused on three key areas: managing rising costs and economic uncertainty, strengthening client relationships to stay competitive and evolving recruitment strategies to address persistent labor shortages. Here’s a closer look at how construction and design businesses are adapting.

1. Rising Costs and Uncertainty Weigh on Q2 Outlook

Cost pressures and broader economic uncertainty remain top concerns for construction and design professionals heading into the second quarter.
Nearly half of firms cite rising costs of products and materials as a key challenge (49% construction, 45% design).

Broader macroeconomic concerns also persist, particularly among design firms:Geopolitical uncertainty (23% construction, 30% design)Tariffs (17% construction, 30% design)Client hesitation continues to affect project timelines, with more than a quarter of firms reporting homeowners are delaying project starts (27% construction, 30% design).

In construction, labor constraints remain especially pronounced, with more than two-thirds of firms (67%) reporting skilled labor shortages.

Pros Expect Q2 Rebound After Softer Start to 2026

2. Firms Focus on Client Experience to Stay Competitive

As competition intensifies, professionals are prioritizing client communication and experience to win and retain projects. Improving client communication is the most widely adopted strategy across both sectors, cited by 60% of construction firms and 45% of design firms.

Other approaches include:Adjusting pricing or offering promotions (42% construction, 19% design)Construction firms are more likely to rely on pricing strategies to secure work, while design firms continue to emphasize experience-driven differentiation and branding.

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3. Recruitment Strategies Evolve Amid Labor Shortages

Ongoing labor constraints are pushing firms to rethink how they attract and retain talent. More than half of construction firms are investing in on-the-job training programs (57%), while design firms are more likely to pursue academic partnerships (26%).

Both sectors are expanding digital recruiting efforts:Social media recruiting (35% construction, 36% design)Highlighting use of advanced technology — AI, project management tools like Houzz Pro (10% construction, 16% design)These strategies reflect a broader effort to reach younger, tech-savvy talent while addressing long-term workforce gaps.

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This article was originally published by a www.houzz.com . Read the Original article here. .



The quarterly U.S. Houzz Renovation Barometer asks more than 1,000 construction and architecture and design firms on Houzz about their expected, current and recent business activity. The just-released Q4 2025 Barometer, fielded Sept. 18-Oct. 6, also dug into pros’ anticipated client concerns and business plans for 2026.

While construction firms see renewed momentum heading into Q4, and design firms’ expectations are holding steady, the report found that nearly all businesses expect homeowners to raise concerns as they embark on renovation projects next year. At the same time, the vast majority of firms industrywide are planning to adjust how they do business.

Here’s a closer look at firms’ responses, broken down by industry sector.



This article was originally published by a www.houzz.com . Read the Original article here. .



After kicking off 2025 feeling bullish, construction and design professionals have tempered their optimism about business activity in the second quarter of the year. This follows a significant dip in Q1 performance among construction firms and relatively stable performance among design firms.

Those are key findings in the just-released Q2 2025 U.S. Houzz Renovation Barometer, which provides timely insights into the residential renovation industry, including expectations, project backlogs and recent activity among businesses in the construction sector and the architectural and design services sector.

“Optimism continues, yet residential construction and design businesses are moderating expectations amid mixed Q1 activity and economic uncertainty,” Houzz staff economist Marine Sargsyan says. “This tempered outlook is unsurprising, as firms continue to navigate challenges including rising material costs, cautious client spending and persistent labor shortages. In response, many firms are proactively adjusting procurement strategies and selectively stockpiling materials in preparation for anticipated tariff-driven price hikes, especially on lumber, steel and cabinetry.”



This article was originally published by a www.houzz.com . Read the Original article here. .



Residential construction and design professionals have an optimistic outlook for 2025, with more than 3 in 5 firms reporting positive expectations for overall business performance, according to the just-released 2025 U.S. Houzz State of the Industry report. Businesses across industry sectors anticipate high revenue growth rates, heightened demand for their services and improved local and national economies, even as they brace for rising costs and worsening labor shortages. This widespread optimism follows a year marked by unexpected revenue and profitability declines industrywide.

“Home professionals are entering 2025 with renewed confidence and expectations for growth in both revenue and profitability after navigating two difficult years,” Houzz staff economist Marine Sargsyan says. “Pros report that they’ve implemented new processes for operational efficiency and client communication and made strategic investments in technology to address the challenges they faced last year. This will better position them for an anticipated increase in demand, enhance their resilience amidst potential tariffs and leverage expected improvements in both local and national economic conditions.”

Here’s what the report reveals about firms’ expectations for 2025 and performances in 2024.



This article was originally published by a www.houzz.com . Read the Original article here. .

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