Are your customers telling you the whole truth?
2019 Second Quarter Market PredictionsMay 15th, 2019 by
Industry trends, predictions, and more!
Each quarter, we send our Market Predictions Survey to our 2,500+ GuildQuality members to get a better understanding of the state of the residential construction industry. This report contains a summary of the feedback we received regarding Q2 2019.
In this review, we’ll examine the results indicating how our respondents feel about the current state of the market, how they expect the market and their company performance to change in 2019, what their long and near-term strategies are, which industry trends they believe are rising and waning, and finally, how they feel about qualified labor this quarter.
Current State of the Market
In Q1 of 2019, 81% of respondents believed the current state of the market was in Excellent or Good condition. At the same time, only 2% of respondents indicated the market was in Poor or Horrible condition.
In our most recent survey, the percent of respondents who indicated Good or Excellent increased slightly to 83%. The percent of Poor and Horrible responses remained low at 1%, and the percent of Fair responses decreased slightly to 15%. Overall, these results indicate that the market is in excellent condition with minimal fluctuation.
Expected Change in the Market
We also asked respondents to share how they expected the market would change in Q2 of 2019. Six months ago, the percent of respondents who believed the market would Improve or Significantly Improve took a historically low dip (21%). At the same time, we saw an abnormally high percentage of respondents who believed the market would Decline or Significantly Decline (17%).
This quarter, our results have remained nearly the same as those from Q1, with 33% of respondents indicating the market would Improve or Significantly Improve, and 8% indicating the market would Decline or Significantly Decline. Meanwhile, the percent of Remain the Same responses decreased by 1% (from 58% to 57%). Given these results, we can conclude that the market is in a stable position, with more companies expecting the market to improve over not.
Expected Change in Company Performance
This quarter, we saw a minimal amount of change in the Expected Change in Company Performance metric. The percent of respondents who selected Improve or Significantly Improve declined by 3% (from 73% to 70%), while Decline or Significantly Decline responses increased by 1% (from 2% to 3%). Remain the Same responses were also up by 2% (from 24% to 26%).
These results tell us that the majority of respondents are hopeful that their company’s performance will improve throughout Q2, similar to the sentiments from Q1.
Qualified Labor Rating
Last year, we introduced the Qualified Labor Rating and the Qualified Labor Change into the Quarterly Market Predictions Report. The ongoing labor shortage continues to be a challenge for businesses in the residential construction industry, which is why we wanted to ask our Guildmembers exactly how they’d rate today’s qualified labor.
Unfortunately, the Qualified Labor Rating is still not in a great place. The percentage of Poor and Horrible responses increased by 4% (from 39% to 44%), while the percentage of Good and Excellent responses decreased by 4% (from 23% to 19%).
Qualified Labor Change
We also asked our Guildmembers, “Relative to the last six months, how has the availability of qualified labor changed?” 9% reported a positive change (i.e. the availability of qualified labor Improved or Significantly Improved), while 29% reported a negative change (i.e. availability Declined or Significantly Declined). The rest of our respondents (61%) reported not seeing any kind of change over the last six months.
If you or someone you know needs to hire skilled workers for your business, check out GuildQuality’s Job Board, a complementary resource for GuildQuality members.
We asked respondents what new or existing trends they saw more of. Similar to Q1 of 2019, the three most common emerging trends were:
- White replacing grey as the most popular neutral
- Smart home automation and technology
- A desire for outdoor living spaces
“I have seen a huge spike in the amout of homeowners that want to build sunrooms and outdoor living spaces.”
In addition to emerging trends, we asked respondents which trends they saw less of last quarter. According to their answers, here are the trends they believe are on the way out:
- Carpeting and linoleum flooring
- Granite countertops
- Whirlpool Tubs and stand-alone tubs
“Tubs usually get omitted in master bathroom renovations in favor of large showers, more countertop space, and added storage.”
- Strengthening search engine optimization
- Better communication both internally and externally
- Attending more tradeshows and conferences to develop new skills and discover the latest trends
- Hiring in anticipation of busy season
- Working with local school and universities to create career paths for the trades
- Seeking qualified candidates on a continuous basis instead of only when needed
- Automating processes to reduce the amount of administrative work
- Establishing a base of past clientele to use for referral marketing
- Expanding into complementary but diversified revenue streams
- Purchasing land and investing in real estate
Below are a few additional comments from our respondents that we thought encompassed their overall struggles and successes of working within the residential construction industry.
“We are working to improve homeowner’s expectations and become more transparent, as design-build jobs become more and more custom.”
“With the labor shortage continuing to be a challenge in our industry, we are focusing on year round recruiting, better benefits for our employees, and more skilled training.”