According to the 2022 Houzz UK State of the Industry report, which provides an outlook on 2022 and review of 2021 performance for residential renovation and design businesses based on data reported by industry professionals in the Houzz community, businesses have a confident outlook for 2022. The report revealed that more than three-quarters anticipate revenue growth (76%) and two-thirds expecting profits to increase (66%). This follows strong 2021 results with more companies reporting revenue growth, as compared to the previous four years, exceeding expectations for the year.
“Following a successful year for the home renovation and design industry, the findings from the Houzz State of the Industry report show that professionals are bullish that momentum will continue throughout 2022,” said Marine Sargsyan, Houzz senior economist. “The positive outlook is prevalent across industry groups from interior designers to builders, despite global challenges and increased costs of doing business.”
The report's key findings:
* Design and build firms are the most optimistic about revenue growth in 2022 (88%), followed by interior designers and architects (80% and 76% respectively). Companies across all industry sectors plan to grow revenue by bringing in larger budget projects (60%).
* In 2021, a larger share of businesses reported year-over-year revenue growth than in the last four years (69%). More than two-thirds of companies reported that revenue growth was at or above their initial expectations for the year (69%). Nearly three quarters of both design and build firms and architects reported increases in gross revenues in 2021 (72%), followed by interior designers (70%).
* More than a quarter of businesses increased headcount in 2021 (29%), compared with only 17% of businesses who added employees in 2020. Design and build firms were the most likely to hire last year (35%), compared with architects and interior designers (29% and 26% respectively). Hiring is expected to continue among nearly two in five of businesses in 2022 to support revenue growth (38%).
* More than three-quarters of businesses reported an increase in the cost of doing business in 2021 (77%). Design and build firms were the most impacted by rising costs (94%), followed by interior designers and architects (70% and 65% respectively). Price volatility of products and materials was one of the top challenges reported by one in five businesses (22%).