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Industry Index Indicates Stable Project Backlogs and Product Availability for Exterior Contractors

Article-Industry Index Indicates Stable Project Backlogs and Product Availability for Exterior Contractors

Farnsworth Group 4.13.23_Farnsworth Group Q1 data for contractors
The latest data from the Farnsworth Group points toward a continued positive outlook for home improvement construction companies in 2023’s second quarter.

A well-regarded construction confidence index shows that exterior and other contractors have lots of work and that material availability is way up since early 2022.

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.

In Q1, respondents in five construction categories had project backlogs of about eight weeks, though exterior contractors saw a drop in backlog time from just over nine weeks to just over eight weeks. Company president Grant Farnsworth noted in his report that this is likely due to the seasonality of exterior projects and the movement out of the colder winter months into spring.

Keeping with that trend, 67% of exterior contractors reported expectations of revenue increases over the next 12 months, with more than half of those respondents expecting 6% to 20% increases.

However, it may be difficult for hiring to keep up with revenue increases. Of the exterior contractors, 58% reported having challenges hiring skilled laborers in the past 12 months. This number comes in a bit higher than Q1 2022 (55%), but substantially higher than Q4 2022 (40%).

Pros' confidence in their ability to bring in new business in the next six months was rated 83 out of 100. This rating remains the same as in Q4 2022 and, according to Farnsworth, “marks a sense of strong confidence among contractors in securing new business opportunities in the coming months.”

Meanwhile, material availability increased year over year across all respondent groups, jumping from 64 out of 100 in Q1 2022 to 76 out of 100 in Q1 2023 for exterior contractors specifically.

Farnsworth 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. 

For a more in-depth look at current and historical data, find the full Farnsworth report here.

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