Q1 of 2024 results from the Farnsworth Quarterly Contractor Index are now available to download.
There certainly is a lot going on within building products and home improvement, even early in the new year: Labor challenges, material availability, and homeowners' budget constraints are all on top of neutral consumer confidence, not to mention the potential for geopolitical events to cause further uncertainty.
However, the supply and demand fundamentals continue to suggest that good times are ahead, and our Q1 Contractor Index illustrates how residential contractors are feeling that sense of optimism, which was also palpable on the floors of major building products trade shows this spring.
Here's what we are seeing:
1. Contractor Confidence Continuing to Improve
Overall, confidence among residential pros has continues to grow more positive, a trend that has continued into Q1 of 2024, especially among landscaping contractors. Confidence is measured based on contractors' reported confidence in their ability to get business over the next 6 months. The overall contractor confidence score for Q1 of 2024 is 85/100, compared to 81 in Q4, 2023 and 83/100 compared to this time last year, in Q1 of 2023.
2. Project Backlogs Are Still 2 Months Long
Backlogs are still holding strong across trades, with about 7-8 week backlogs being reported by the contractors we spoke with. With the exception of landscapers, all trade groups have a shorter backlog now compared to this time last year. Contractors are not worried about this, as their project volume is still strong, and is simply less overwhelming than in prior years.
3. Volume of New Leads At or Above Levels in Q1 of 2023
Residential contractors are reporting new lead volume levels at or above what they were this time last year, but just like competition has increased for manufacturers and retailers, competition has increased among contractors as well, with homeowners collecting bids more frequently to compare contractor options.
4. Project Revenue is Up QoQ and YoY
The majority of residential contractors said their project revenue is up, both compared to this quarter over last and compared to this time last year. The median factor of revenue growth being reported is 6-10%.
Top Takeaways for Go To Market Planning for 2024
Based on this quarters' reporting, we advise that you and your teams continue to become highly attuned to the budget sensitivity of the homeowner, because their budgets drive projects, which drives product sales and contractor activity levels.
For deeper industry insights on what this means specifically to your business and what to be paying attention to going forward regarding your customers, brand and products, simply schedule a consultation about commissioning custom market research.
And be sure to check out the full report of our most current Farnsworth Contractor Index below:
