This story was originally publish in Remodeling.

Courtesy Houzz

Remodelers, design/build contractors, and architects are generally bullish on market conditions and expect continued growth this year, Houzz reports in its 2018 State of the Industry Survey issued this week.

Market Optimism
A total of 404 architects, 809 remodelers, and 415 design/build firms registered with Houzz were polled between November 2017 and January 2018. The majority of firms have a positive outlook for 2018; 72 percent of firms in all three categories said it will either be a "good" or "very good" year. The remodeling industry was particularly optimistic, as 36 percent of remodelers and 42 percent of design build firms said it will be a "very good" year.

Architects Show Caution
Architecture firms were the most conservative industry group polled throughout the survey, predicting just 6.9 percent revenue growth compared with remodelers (10.5 percent) and design/build firms (9.9 percent). Additionally, when it came to expected profit growth, 56 percent of architects expected profits to increase compared with 72 percent of remodelers and design/build firms.

2017 vs. 2018
But this year's growth won't top last year's, all three groups predict. General contractors reported an average 10.6 percent rise in sales in 2017 and count on a 10.5 percent increase this year. Design/build firms grew more last year, up 11.1 percent, but think they'll gain only 9.9 percent in 2018. (Both the general contractors and design/build firms grew faster than the top 300 full-service firms on the soon-to-be-published Remodeling 550 list. That group's revenues rose 7.4 percent.) Meanwhile, architects said their business increased 8.2 percent in 2017 but will grow just 6.9 percent this year.

Business Costs Rising
While revenues and profits are expected to grow, firms also see input costs getting more expensive. Expected labor availability, labor costs, and materials costs are all projected to get worse. Fifty-three percent of remodelers and 52 percent of design/build firms see labor availability getting worse, and at least half the firms from all three industries expect labor costs to rise. The same can be said for expectations of materials costs, but remodelers and design/build firms are even more pessimistic. On this front, 60 percent of remodelers and 59 percent of design/build firms say materials costs are going up.

A link to the full survey can be found here.

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