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Houzz Inc., the leading platform for home remodeling and design, today released the Q4 2019 Houzz Renovation Barometer, which tracks residential renovation market expectations, project backlogs and recent activity among businesses in the construction sector and the architectural and design services sector in the U.S. The Barometer points to strong expectations for home renovation market activity in the fourth quarter of the year.

“It is promising that expectations in the construction sector bounced back up from some of the lowest that we've seen last quarter. The architectural and design sector outlook also remains strong despite a mild quarter-over-quarter dip,” said Nino Sitchinava, Houzz principal economist. “That said, project backlogs in both sectors remain significantly below year-over-year levels, indicating that the renovation activity in the last three months was not strong enough to offset the lackluster first half of the year. Businesses report that labor shortages, a shortened renovation season and continued weather disruptions, in addition to rising product costs and economic uncertainty, are contributing to project delays and a shift toward smaller projects.”

Construction Sector
- The Expected Business Activity Indicator related to project inquiries and new committed projects increased to 74 in Q4 (up four points relative to Q3). The increase is a result of an increase in expectations for project inquiries (up ten points to 78 in Q4) and a slight decline in new committed projects (down one point to 70 in Q4).
- The Project Backlog Indicator increased to 5.2 weeks in Q4 relative to Q3 (4.9 weeks). Wait times are 1.1 weeks shorter than a year ago.
- The Recent Business Activity Indicator related to project inquiries and new committed projects increased to 63 in Q3 (up five points points relative to Q2). This follows an increase in project inquiries to 67 in Q3 (up eleven points relative to Q2), and only a slight increase in new committed projects to 60 compared to Q2 (up one point).

Architectural and Design Services Sector
- The Expected Business Activity Indicator related to project inquiries and new committed projects decreased to 67 in Q4 (down four points relative to Q3). Expectations decreased for both project inquiries (down three points to 67 in Q4) and for new committed projects (down five points to 67 in Q4).
- The Project Backlog Indicator declined to 4.1 weeks in Q4 relative to Q3 (4.7 weeks). Wait times are a week shorter than a year ago.
- The Recent Business Activity Indicator related to project inquiries and new committed projects declined to 57 in Q3 (down six points relative to Q2). The decline is a result of a decrease in project inquiries to 57 (down four points in Q2) and a decrease in new committed projects to 57 (down seven points relative to Q2).

Notes to Editors
The Houzz Renovation Barometer is based on a quarterly online survey sent to a national panel of businesses with an online profile on Houzz. The Barometer keeps a pulse on home renovation market conditions via three distinct indices that track expected, current, and recent business activity in two related industry sectors, the construction sector and the architectural and design services sector.

The Expected Business Activity Indicator is based on survey questions that ask businesses to report whether they expect the number of project inquiries and new committed projects to increase, decrease or stay unchanged in the upcoming quarter relative to the prior quarter. Scores for each component are then computed as a seasonally adjusted diffusion indices on a scale of 0 to 100, with index values over 50 indicating that a greater proportion of firms reported quarter-over-quarter increases than those reporting decreases.

The Recent Business Activity Indicator is based on survey questions that ask businesses to report whether they observed the actual number of project inquiries and new committed projects increasing, decreasing or staying unchanged in the most recent quarter relative to the prior quarter. Scores for each component are then computed as a seasonally adjusted diffusion indices similar to the Expected Business Activity Indicator. Recent Business Activity Indicator scores can be compared to the Expected Business Activity Indicator scores for any given quarter to see whether actual activity met, exceeded, or fell short of expectations.

Finally, the Backlog Indicator is based on survey questions that ask businesses to report wait times in weeks before a company can start work on a new midsize project. Scores are computed as average wait times without a seasonal adjustment.

All three indices are computed individually for two subsectors in the construction sector (build only remodelers and design and build remodelers) and for two subsectors in the architectural and design services sector (architects and interior designers), as well as for nine regions that follow U.S. Census Bureau Divisions. The aggregated national indices are computed using industry subsector weights and regional weights derived from the 2016 U.S. Census County Business Patterns survey. Detailed methodology and underlying quarterly indices for the construction sector and the architectural and design services sector, and other information on market conditions can be found on houzz.com/research.

The Q4 2019 Barometer was fielded September 26th through October 9th and garnered responses from more than 2,000 small businesses on Houzz. n=2,006.

The Q1 2020 Houzz Renovation Barometer release date is January 14, 2020.

About Houzz
Houzz is the leading platform for home remodeling and design, providing people with everything they need to improve their homes from start to finish – online or from a mobile device. From decorating a small room to building a custom home and everything in between, Houzz connects millions of homeowners, home design enthusiasts and home improvement professionals across the country and around the world. With the largest residential design database in the world and a vibrant community empowered by technology, Houzz is the easiest way for people to find inspiration, get advice, buy products and hire the professionals they need to help turn their ideas into reality. Headquartered in Palo Alto, Calif., Houzz also has international offices in London, Berlin, Sydney, Moscow, Tel Aviv and Tokyo. Houzz is a registered trademark of Houzz Inc. worldwide. For more information, visit houzz.com.