2024 U . S . HOUZZ STATE OF THE INDUSTRY REPORT
Revenue growth estimates rebound
Businesses across all seven industry groups expect an increase in revenue and profits in 2024 , following a challenging 2023 .
Landscaping and outdoor firms expectations for 2024 : Revenue : 55 % expect increase , 16 % expect decrease . Profits : 51 % expect increase , 20 % expect decrease .
Decreased labor availability and rising labor costs
Six of the seven industry groups predict labor shortages will continue in 2024 . Expectations for rising labor costs in 2024 are also prevalent across the industry , with more firms planning for higher costs compared with the previous year .
Landscaping and outdoor firms expectations for 2024 : Labor availability : 23 % improve ; 34 % worsen . Labor costs : 9 % improve ; 51 % worsen .
Better product and material availability but higher costs
More businesses across the industry expect product and material availability to improve than to worsen in 2024 , with optimism from design-build firms ( 44 %). However , more businesses also expect costs to rise this year than did the previous year .
Landscaping and outdoor firms expectations for 2024 : Product / material availability : 33 % improve ; 19 % worsen . Product / material costs : 11 % improve ; 55 % worsen .
2023 IN FOCUS
Revenue growth took a dip
Among the seven industry sectors *, five reported a decline in annual revenue for 2023 compared with the previous year . Landscaping and outdoor pros experienced the sharpest drop in 2023 , with average revenue decreasing by 1.9 %.
Average annual rate of revenue growth , as reported by landscape and outdoor firms : 2023 : -1.9 % 2022 : 0.3 % 2021 : 10.0 % 2020 : 3.0 % 2019 : 5.7 %
Profits rose for many firms
More firms across six of the seven industry groups reported a profit increase than a decrease in 2023 . Among landscaping and outdoor specialists , 38 % saw a profit increase .
The cost of doing business
The majority of firms in the seven industry groups experienced an increase in the cost of doing business in 2023 versus 2022 . Although the share of firms reporting a cost increase has decreased slightly from 2022 ( 70 % compared to 91 %), it remains notably high . 78 % of landscape and outdoor firms reported year-over-year change in cost of doing business .
Materials and labor drove overall cost hikes
Landscape and outdoor firms reported the top three drivers of increase in cost of doing business in 2023 : 1 . Product or material costs ( 68 %; + 6 pp YOY ) 2 . Employee wages or benefits costs ( 45 %; + 9 pp YOY ) 3 . Business insurance costs ( 31 %; + 14 pp YOY )
Top three challenges changed
Landscape and outdoor firms reported the top three business challenges in 2023 : 1 . Increased cost of doing business ( 44 %; + 17 pp YOY ) 2 . Difficulty finding prospective customers ( 26 %; + 18 pp YOY ) 3 . Difficulty hiring / being understaffed ( 23 %)
Number of projects
The share of businesses that worked on 30 or more projects in 2023 declined significantly for six of the seven industry groups . The majority of businesses worked on fewer than 30 projects in 2023 . In the landscape and outdoor sector , 18 % reported they had fewer than 10 projects in 2023 , 48 % had 10-29 projects , and 34 % reported more than 30 projects . Meanwhile , 57 % reported fewer than 10 of their projects came from online inquiries , 20 % had 10-29 projects via online inquiries , and 23 % stated that more than 30 of their projects were generated via online inquiries .
Annual gross revenue
Landscape and outdoor firms reporting annual gross revenue : <$ 500K : 61 % $ 500K- $ 2.9M : 30 % $ 3M +: 8 %
Number of employees
Landscape and outdoor firms reporting number of employees in
2023 : None : 33 % 1-4 : 35 % 5 +: 31 %
* Industry groups detailed in the report include architects , interior designers , GCs / remodelers / builders , design-build firms , specialty building & renovation , landscaping & outdoor , and decorating specialty firms .
30 OPE + March 2024 www . OPE-Plus . com