The Farnsworth Group recently released the fourth-quarter 2021 results of its Farnsworth Contractor Index.
In creating this index, the Farnsworth Group said it wanted to better understand trending data across various topics of the home improvement market on a quarterly or biannual basis.
The sample for this round of the study included 519 respondents across various construction and remodeling trades within the five industry segments.
Each quarter The Farnsworth Group provides its Contractor Index to the building products and lawn & garden industries.
The group surveys hundreds of residential contractors from five main areas:
- Remodeling contractors (remodelers, GCs);
- Exterior contractors (roofers, siding/window contractors);
- Finish contractors (painters, flooring contractors, carpenters, drywall);
- Mechanical contractors (plumbers, electricians, HVAC);
- Landscape contractors (landscapers, decking contractors, concrete)
"We continue to see optimism and increased project activity among trades involved with the interior of the home," Grant Farnsworth, president of the Farnsworth Group, told Roofing & Exteriors. "Exterior trades are feeling the effects of seasonality, along with ongoing challenges of supply chain and labor."
On a scale of 1-10, remodelers are more confident in their company’s ability to get new business in the next six months (up from 7.6 in Q3 to 8.3 in Q4), while exterior professionals' confidence level dropped from 8.5 to 7.8 from Q3 to Q4.
"Most significant are the volume of leads," Farnsworth said. "Contractors are reporting their ability to close improving at a rate that’s the highest recorded in the Farnsworth Contractor Index. Even better, the quality of leads is the highest we’ve ever seen."
Those respondents also expect their company's revenues to increase over the next 12 months—64% from the remodeling segment and 74% from the exterior segment.
Most remodelers forecasted an 11-20% revenue growth while exterior professionals see it expanding from 11-30%
Respondents also reported remaining challenges hiring skilled labor over the last 12 months. In Q3, it appeared that things had improved for exterior contractors as 44% said they experienced those issues—down from 50.8% in the Q2 index.
That number jumped to 63% in Q4.
"Most trades, including exterior trades such as roofers, have expressed increased labor challenges higher than the prior seven quarters," Farnsworth said. "Contractor confidence and workloads continue to increase quarter over quarter and in some cases are higher than pre-pandemic levels."
Those surveyed were also asked about the governmental policies, the economy and other factors that may or may not impact their businesses.
"Contractor activity and sentiment support a strong start to 2022 and likely strong contractor activity on existing homes throughout the year based on high demand, volume, and quantity of leads," Farnsworth said. "However, labor and availability may continue to limit how much volume contractors can take on."