Data from the Q2-2022 Farnsworth Contractor Index points toward higher contractor confidence compared to Q1 of this year and is on par with that from Q2 of 2021. This is a normal pattern seen from Q1 to Q2 of a given year, according to the Farnsworth Group's analysis. Thus, the year-over-year comparison provides a more accurate assessment of contractor confidence levels. The current index is much higher than the same quarter of 2020 (no surprise, due to the tumultuous beginning months of the response to COVID-19).
The Farnsworth Group's Quarterly Contractor Index tracks business confidence among trade professionals and small businesses, serving as an indicator of the health of the residential home improvement industry. The index surveys hundreds of residential contractors from five main categories: remodelers, exterior contractors, mechanical contractors, finishing contractors and landscaping contractors. The respondents must have completed at least 50% of their work on residential projects.
Respondents expressed little concern with credit availability for Q2, but Farnsworth notes that, in light of "the Fed’s June decision and indication that a similar tightening effort will be enacted again when they meet in July," it anticipates contractor confidence for credit availability to decline in Q3.
Farnsworth's data also indicated contractors are keeping busy, with most seeing two-month delays for remodeling projects and new project starts. On average, exterior contractors are booked out eight and a half weeks, compared to seven and a half in Q1. Material costs remain high but stable, allowing for more predictability in project margins.
Head to Farnsworth's site for a more in-depth look at the data and predictions for the coming months.
