Are your customers telling you the whole truth?
2021 Fourth Quarter Market PredictionsDecember 9th, 2021 by
Industry trends, predictions, and more!
Since 2008, we’ve sent our Market Predictions Survey to our 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 Q4 2021.
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 as we bid farewell to 2021, what their long- and near-term strategies are, which industry trends they believe are rising and waning, and finally, how they currently feel about qualified labor.
Current State of the Market
As a whole, our members are starting to feel slightly better and more optimistic about the state of today’s market. The percentage of members reporting feeling Good or Excellent about today’s market rose by about one percentage point: 83% from the 82% reported in Q3 of this year. It is a small increase, but we’ll take what we can get, all things considered—and it’s a solid boost from the 78% of members who reported a positive quarter in Q4 of 2020.
The percentage of Poor and Horrible responses dropped only by half of a percentage point from last quarter’s 3%. While this isn’t a huge change, it is encouraging, particularly in the context of the increase in overall positive feelings about this quarter. The percentage of Fair responses dropped approximately one-quarter of a percentage point. As a whole, Q4 of 2021 was a good quarter for most of our members.
Expected Change in the Market
Our members’ predictions about how the market will change as the quarter progresses haven’t shifted much from Q3. Similar to last quarter, just under 60% of respondents report that they think the market will Remain the Same. As we enter another year under the cloud of a global pandemic, stability is a good thing.
The percentage of members anticipating a decline in the market stayed about the same as last quarter at just under 20%. Survey respondents predicting that the market will Improve or Significantly Improve rose one-half of a percentage point from last quarter’s 21.5%.
Expected Change in Company Performance
In an interesting change from previous quarters this year, the percentage of survey respondents who anticipate that their companies will either decline or improve in performance both increased.
Compared to just over 7% last quarter, just under 9% of respondents this quarter expect their company performance to Decline or Significantly Decline. On the other end of the spectrum, the percentage of respondents who expect their company performance to Improve or Significantly Improve increased this quarter by over ten percentage points: just over 59% compared to 48% reporting the same last quarter.
As we begin to see the light at the end of the pandemic tunnel, our members report feeling more optimistic overall about their business’ performance. Those anticipating their company to Remain the Same in terms of performance took a dramatic drop from almost 45% last quarter to just under 32% in Q4. Despite the slight increase in negative predictions, the outlook from most of our members is positive.
Qualified Labor Rating
Finding good, qualified employees continues to be a tremendous struggle. The percentage of our members who responded negatively—Poor or Horrible—when asked about the current state of qualified labor decreased very slightly to just over 56% compared to last quarter’s 58%.
Time will ultimately give us more insight, but even a single percentage point decrease could be a good sign when we look at it with the percentage of members who responded positively. Just over 13% of survey respondents answered that they found qualified labor to be Good or Excellent this quarter.
This is an increase of a little over one percentage point from last quarter’s 12%. The percentage of members who responded Fair when asked about qualified labor this quarter stayed the same as last quarter at 30%.
Difficulties in finding qualified candidates for open positions is taxing on our members, particularly when home improvement jobs are still in such high demand.
“It’s very challenging to find crews who are able and willing to erect the houses we assemble onsite + team members for our warehouse.”
“We are still struggling to hire qualified employees or even get people to apply for job openings.”
Qualified Labor Change
When asked about how the availability of qualified labor has changed over the past six months, the majority—almost 45%—of our survey respondents answered negatively (Significantly Declined or Declined). This is an increase from the 40% who answered the same last quarter.
An encouraging sign, however, is the jump in positive responses. This quarter, just over 10% of respondents indicated that they’re seeing a positive trend in the availability of qualified labor. Compared to the 3.5% who answered positively last quarter, this is a great sign that the labor shortage could be improving.
When we asked our members about the new or existing trends they saw more of over the last quarter, the top three most common answers were:
- A focus on home repairs and updates that are absolutely necessary instead of the optional, “nice to have” improvements
- Home additions to accommodate family needs
- Energy efficiency in plumbing, windows, and exterior cladding
“More additions due to lack of housing inventory in certain high-demand areas.”
“It seems that education from our industry has increased awareness of the importance of good design and quality products as they relate to comfort, resale, maintenance efforts, and cost.”
We also asked our members about trends they’re seeing less of as we close out 2021. Here are the top three answers:
- Brushed nickel, stainless steel, and chrome finishes
- Large homes, especially those over 4,000 square feet
- Formal spaces
“Formal spaces are making way for multifunctional spaces for work/school/family.”
“Continued but gradual move away from white, stainless steel, and satin nickel finishes.”
- Implementing process efficiencies
- Boosting incentives for existing employees
- Staying operationally nimble and aware to combat material shortages
“Making larger investment in digital marketing, specific to finding prospects who want or need to do something now.”
“Training personnel and innovating our operations to increase efficiency.”
- Refining recruiting processes and developing relationships with local trade schools and other sources of potential employees
- Focusing on internal operations and efficiencies
- Reducing debt to better prepare for market shifts
“Documenting processes and setting up checklists, templates and similar to ensure tasks complete and to allow repeatability; add staffing; continue to refine leads and interview/intake process.”
“Continuous search for labor.”
“Creating efficient processes that allow us to build more homes with the same staffing levels.”
The residential construction and remodeling industry isn’t easy these days. Providing a high-demand service in a time of supply chain disruptions is a unique challenge, and one that will hopefully ease soon.
Here are a few additional comments from your industry peers that give some insight into how they’re navigating business.
“I am thankful for the personnel that we have and I intend to make sure they’re completely happy with their positions. When the time is right, I am confident we will find additional personnel. Until that time, my current team is job one.”
“It’s good that we are busy, but managing projects has become much more labor intensive. Our job has gotten a lot harder, which is pushing good people out of our industry due to the stress. We still love what we do but circumstances have made our work more stressful than ever. Getting good surveys from clients is more challenging with all the delays and changes occurring, including staffing issues which has become a reflection on our company. We are doing the best we can in very difficult circumstances at times.”