From multiple study results in Q4 of 2022, we are seeing the impacts in Pro's businesses as a result of homeowners intending to do more work on their properties, but having to make trade-offs to balance HOW MUCH they spend, WHAT they purchase, WHO completes the work, and WHEN they actually complete the project.
Overall Changes in Remodeling Behaviors
Pros and Homeowners Alike Are Making More Trade-offs to Balance HOW MUCH They Spend, WHAT They Purchase, and WHEN They Complete the Project
Pros are seeing this reality manifest in their pipelines.
Since July, we’ve seen an 8% increase in the percent of Pros delaying or stopping their projects, increasing by about 10 percent compared to 6 months ago (from 34% in July to 38% in December) but steady with 37% reporting project postponements this time last year.
Your job as a team is to continue generating interest at the project level and awareness of key purchase driver attributes at the product level. Simultaneously, adjust your pricing strategy to remain in the consideration stage of your buyers' journey.
In the Eyes of Trade Professionals
Contractors and Trade Professionals Are Experiencing Pressures on Future Sales Pipelines from Project Delays and Homeowner Budget Constraints
Pictured below are trend lines over the last 16 months reporting on what Pros say are their main reasons for project delays and stoppage.
- Material availability (58%)
- Material prices (34%)
- Homeowner decision based on something else (31%)
- Lack of labor/workers (22%)
- Covid concerns of homeowner (16.5%)
Notice the upward trend on the yellow line tracking if the Pro’s are having jobs cancelled or delayed as a result of “homeowner decision based on something else.”Last December, 14% of Pros with delays reported those delays were coming from the homeowner. That response has doubled this December with 31% of project delays contributed to the Homeowner's decision to delay or stop a project.
Further, 1 in 4 Pros said they purchased less than planned and closer to 1 in 3 purchased a cheaper brand as a result of pressures from current material prices.
Because of this, we see that Pros are still regularly trying new brands and suppliers compared year over year. 1 in 3 Pros are still trying new brands and new products for the first time consistently when we look month over month and year over year.
The cause for this brand switching has been less constant, however, and price is becoming the new availability as we round the corner into 2023. Pros are facing pressures to cut costs where they can in order to continue winning bids from a decreasing pool of opportunity among DIFM homeowners.
This manifests into Pros continuing to try and find more cost-effective suppliers and products to get the job done and maintain a healthy margin for themselves. 29% of Pros said they purchased less than planned and 26% purchased a cheaper brand as a result of pressures from current material prices.
From the latest findings in the Farnsworth Quarterly Contractor Index, the market pressures are creating a new business development environment for contractors.
In the Q4 2022 report, we see evidence that market pressures are resulting in contractor bids going out for perhaps fewer projects, but that those project sizes have primarily increased or stayed the same over the past 3 months.
It is a very positive sign for the 2023 repair and remodel market that project sizes are not decreasing in size. Further, contractors are still seeing 8-9 week project lead times and contractor’s sales teams are not showing signs of struggling to close on projects.
For a deeper look a trade professional’s current sentiments, download the full version of the latest iteration of The Farnsworth Contractor Confidence Index.
