Work remains fairly easy to find for many HVAC contractors. Workers, not so much. A pair of recent surveys show the opportunities and challenges heading toward the end of the year.
Home improvement professionals say they posted a banner year, according to the Pro Pulse Survey from Lowe’s. Sixty percent of respondents said this was their busiest year ever. Overall, the survey professionals reported an average of nearly 11 projects per month in 2021. The survey queried 1,000 home improvement professionals.
More than 70% of the Lowe’s survey respondents expect to be busier than ever this winter and going forward expect their monthly average of jobs to increase by 45% in 2022. Trends look especially good for HVAC contractors. Respondents expect to see increased demand in 2022 for projects aimed at adding functionality for homeowners. On the new-home side of the business, construction contractors continue to see strong demand for home offices.
The biggest demand respondents anticipate for 2022 will be upgrades that improve energy efficiency. Consumers may want to save money in the long run, but they’re willing to spend money upfront today. More than half of respondents say people are spending more money on home improvement projects.
Lack of Workers
A survey by Jobber paints as positive a picture as the one from Lowe’s. Jobber’s Leading Indicator of Remodeling Activity (LIRA) shows strong growth, which is projected to accelerate in the last quarter of 2021. The Contracting segment showed positive growth in new work scheduled year-over-year in the third quarter. Green segment growth in new work scheduled during the third quarter continues to stay positive at just under 10% growth year-over-year.
There are challenges, including higher prices for everything from supplies to fuel. But the biggest obstacle remains a lack of workers. The ratio of hires to job openings has decreased significantly, Jobber reports. Although consumer demand for Home Service returned after declining early on in the pandemic, the percentage of businesses who added employees has not returned at the same pace. In fact, employment dynamics in Jobber’s data look to be essentially flat from June 2020 to September 2021.
The good news on the job front is the people who work in home services like their jobs. More than 90% of the respondents to the Lowe’s survey said they are satisfied in their job as a home improvement professional. On average, respondents rate their optimism about their profession a nine out of 10.
New Home Market Remains Robust
There are a few factors that could hold back growth for contractors who work on existing homes. One is that homeowners face the same inflationary pressures. They are paying more for everything from gasoline to eggs and so they have less money for home improvements. At the same time, money is becoming harder to come by. There haven’t been any new rounds of government stimulus and mortgage rates are rising, limiting the ability to take cash out for projects.
The new-home business remains strong, according to the National Association of Home Builders. Builder sentiment in the market for newly built single-family homes moved three points higher to 83 in November, according to the latest NAHB/Wells Fargo Housing Market Index (HMI).
“The solid market for home building continued in November despite ongoing supply-side challenges,” said NAHB Chairman Chuck Fowke. “Lack of resale inventory combined with strong consumer demand continues to boost single-family home building.”
The NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
