After an unexpected boom for many in the residential construction industry, we were curious how trends would evolve in 2021. Did home builders expect another banner year of growth? Would project volume and operations return to pre-pandemic levels?
To answer these questions, we asked more than a hundred leaders in the residential building industry. The results are in and we’re excited to share the responses from our home builders and remodelers on everything from expected project volume and changes in business operations, to what they anticipate in terms of remote work and client communications in the year ahead.
About the survey
We conducted this survey from January 11, 2021, to January 25, 2021, and received more than 100 responses. Our customers answered questions asking for their take on construction demand, field operations, business practices, and business growth in 2021. CoConstruct’s construction project management software helps over 100,000 building professionals manage clients and trade partners, schedule work, track financials, and more.
The big takeaway?
US home builders and remodelers are ready to grow in 2021. Over 70% of respondents expect to do more projects this year than last year. They also expect that the lessons and business practices from 2020 will follow them into the new year, although a majority do not anticipate these new ways of working, such as remote work and video conferencing, to hinder their ability to grow.
Below are the survey results, industry insights, and recommendations respondents shared.
Fill in the blank: I expect my business will do ______ compared to last year.
New OHSA guidelines stretching schedules and surging lumber prices were met with historic consumer demand that ultimately helped home builders increase their average profit margin per project in 2020. But what’s in store for the new year?
According to CoConstruct home builders and remodelers, they are expecting to do more projects. 70.5% of respondents answered that they expected their business to do more projects compared to last year while 22.6% expect to do about the same amount of projects. Only 6.7% of respondents answered that they expect to do fewer projects in 2021 than in 2020.
These expectations of growth fall in line with the National Association of Home Builders (NAHB) and Wells Fargo Housing Market Index (HMI) which gauges, among other things, builder confidence. Builder confidence finished 2020 with three straight months of record highs before a slight dip in December. Remodeler confidence, measured by NAHB’s Remodeling Market Index (RMI), saw similar positive momentum to end the year although not as strong.
How do you think your business will operate in 2021 compared to previous years?
When it comes to how businesses will operate in the “new normal” of 2021, respondents were split. 37.8% of respondents said their business will operate very differently than the previous two years while 32.7% said their business will operate with some changes but mostly the same as 2020. On the other end of the spectrum, 16.8% of respondents said they expect to operate the same as 2020 and 15.1% expect to operate the same or mostly the same as in 2019 before the pandemic.
So what’s driving the differences in 2021 operation? Home builders and remodelers offered additional clarity behind their split views by explaining what business changes they planned to bring into the new year. For some respondents, the surge in demand resulting from the socioeconomic factors of the pandemic was a pressure cooker that sped up their timeline to improve business processes and push forward. But for other respondents who are looking to maintain their pre-pandemic business practices, they see their desire to operate the same as years past not as a step backward but as a return to normalcy.
What business changes from 2020 (remote work environments, video conferencing, additional safety procedures, etc.) will your business bring into the new year?
While there is a discrepancy between how 2021 will compare operationally with previous years, respondents agree that remote work will be a major component. When asked what business changes home builders and remodelers will bring into 2021, over half said remote work or video conferencing. However, opinions differ on when it’s best to use video calls with clients.
One respondent said, “We will continue with more Zoom meetings, meeting our customers’ new expectations of being able to do & see even more online,” while another respondent noted, “We stay away from prospect meetings that are remote because we do not tend to get a good response when we do not meet in person.”
This divide in the role of video can be attributed in part to home builders and remodelers honing in on different processes going forward. A renewed focus on processes and technology as well as a continuation of safety procedures from the CDC and OHSA were two other key themes from respondents.
What are you most excited to see happen to your business in 2021?
Lastly, we asked respondents: What are you most excited to see happen to your business? Home builders and remodelers answered in resounding union - growth! As we saw earlier in the survey, newfound or improved processes and technologies are how many home builders and remodelers envision this growth taking place.
Many respondents also noted an excitement to work on their business overall in the new year. One respondent said, “Work on my business rather than in my business,” while another said, “More time working with clients and developing new business rather than managing field operations.” Other key themes from responses include hoping to resume in-person meetings and being more selective with projects, specifically larger projects.
Home builders and remodelers are planning to do more projects in 2021 with a renewed emphasis on growth. They plan to achieve this growth by focusing on internal processes that can help their business scale amid the growing demand. While some businesses see the changing business landscape as the start of a “new normal,” other businesses are looking forward to getting back to working like they used to before the pandemic. If you are a home builder or remodeler looking for technology to help improve your processes in 2021 construction project management software might be the right solution for you.