Are your customers telling you the whole truth?
2022 Third Quarter Market PredictionsSeptember 16th, 2022 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 Q3 2022.
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 2022, 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
For the third straight quarter of 2022, the percentage of members reporting feeling Good or Excellent about today’s market dropped compared to the previous quarter, this quarter falling to 61%. This is the lowest we’ve seen since 2020’s second quarter of 59%.
The percentage of Poor and Horrible responses increased one point from last quarter’s 6%. While the outlook across the board is technically declining, only a small fraction of our membership feels truly negative about the current state of the market.
Expected Change in the Market
While the majority of members feel the current state of the market is positive, the expected change in the market is a little more problematic. Last quarter, the percentage of members anticipating a decline in the market sat at 46%. This quarter, that number increased to 54%. It’s worth noting that this quarter’s increase of 8% is a much smaller increase compared to last quarter’s jump of 25%.
We saw an increase in the survey respondents predicting that the market will Improve or Significantly Improve from last quarter’s 8% to this quarter’s 12%. A jump of 4% could mean that costs might begin course correcting in the near future. The remaining 34% of respondents aren’t expecting a change in the market.
Expected Change in Company Performance
Compared to 12% of respondents last quarter, 17% of our members expect company performance to Decline or Significantly Decline. We’ve seen a steady increase of around 6% quarter-over-quarter so far in 2022.
On the positive side, we saw a small drop in respondents who expect company performance to Improve or Significantly Improve: 38% vs. last quarter’s 41%. Again, nearly half of our members don’t expect a positive or negative change, with 45% expecting company performance to remain the same.
Qualified Labor Rating
The percentage of our members who responded negatively—Poor or Horrible—, when asked about the current state of qualified labor, decreased 6 percentage points, from 60% down to 54%. If we see this 6 percentage point decrease again next quarter, we will be back to where we started 2022 out at 48%.
The number of survey respondents who answered that they found qualified labor to be Good or Excellent did not change from last quarter’s 12%.
Qualified Labor Change
When asked about how the availability of qualified labor has changed over the past six months, we saw a decrease in respondents reporting that it has Declined or Significantly Declined, from last quarter’s 34% down to 27%.
We didn’t see a change in respondents that report the pool of qualified labor has Improved or Significantly Improved, as that stayed at 12%.
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:
- Darker colors across the board. Specifically a trend with black – windows, doors, siding, and roofs.
- An increased focus on modernization/efficiency and automation of their home.
- Customers are seemingly becoming more cautious with their spending.
“People are holding on to their money a little tighter, and waiting longer to make a decision on big purchases.”
“We are seeing customers focused on increased home automation and efficiency more and more.”
We also asked our members about trends they’re seeing less of in 2022. Interestingly, the top 2 trends from last quarter haven’t changed. Here are the top three answers:
- Formal dining rooms
- White cabinets
- Open concepts
“There’s a bit of backlash for open concepts right now.”
“Not many formal dining rooms are needed anymore.”
- Investing in recruiting
- Customer experience to lead to more referrals
- Increased marketing/ad dollars
“We’ve added additional HR staff to retain, trim and recruit more effectively”
“More focus on delivering a better customer experience that hopefully leads to better referrals”
- Updating processes/systems
- Creative marketing strategies
- Improve training
“We are getting involved with local college internships and co-op programs to train and develop talent from within!”
“Reviewing and renewing all our sales and marketing processes. We’re spending more time working ON the business, rather than IN the business.”