In this blog, we’ll take a look at the results from a recent study conducted to assess how the the home renovation, home building, trades, and related professional services that support the building sector in Calgary are doing during this time.
A questionnaire was sent to industry experts, and through related home renovation channels for distribution to capture a broad range of business owners and decision makers. In total, 42 respondents completed the questionnaire between May 8 to May 25, 2020. This included responses to an online survey and one-to-one telephone interviews.
While the sample size is small it provides insight to some of the concerns of local businesses in this sector. With the current pandemic and Calgary’s economic situation, the results give the general sentiment of those who work in this industry.
Four Key Findings
1. Majority are negatively impacted, but some are doing okay
Eight-eight percent (88%) of respondents stated their business has decreased since February 2020. This is not a surprise as the Canada Mortgage and Housing Corp. expects home prices, sales and starts will decline substantially this year.
As CEO Dave Gladney put it, “we were battling with a tough economy to start with before the pandemic hit, so it’s kind of a double whammy here in Alberta.”
While this gives a clear indication that the industry is struggling, 12% of respondents indicated their business has stayed the same.
2. Many feel they will be on track within the next 6 months (if not already)
When asked how long they thought it will take for their business to rebound to a "normal" revenue level, 45% stated 6 months. Seven percent (7%) are already on track, 14% stated within 3 months and 19% said within 12 months.
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This is positive news given one of the key factors in economic recovery is how consumers feel about it. If they think it’s going to take a while to recover, then demand will be lower while they wait to see what happens.
“There’s a risk to all economic activity if demand for everything is lower, then production of everything is going to be lower.” ~ Nathan Janzen, Senior Economist Royal Bank of Canada.
In a recent report by the Conference Board of Canada, there is an expectation that the worst of the crisis to pass within a couple of months.
So, in 6 months, we’ll be into the fall / winter season. I asked Elaine Coates of the Calgary Renovation Contractors Association how this would affect the work for this industry given some of it is done outdoors. She explains:“Renovations don’t have a season because for the most part it’s interior work. Typically, work can be done in colder months as long as there’s heat inside the place. By 6 months, people will have been at home for a while and might to want to do some renos. And finances will likely have improved by then so they can plan some upgrades to their residence for that time. They might even consider some handyman tasks they’d like to get done, or a basement or kitchen project."
3. Uncertainty and finding clients are challenges
Uncertainty (6/37) and finding clients (6/37) were stated most often by respondents. Here is the complete list of their challenges from most to least responses.
- Finding clients / work
- Clients comfort with others in their home
- The economy / economic confidence
- Clients putting projects on hold
- Clients cancelling projects
- Keeping motivated to keep going
- Local economy dependence on O&G
- Not being able to meet with clients
- Clients' business closed down
- Managing the same work with children at home
- Stocking PPE
- Waiting it out
- Need to pivot
4. Getting more customers and financial assistance are what they need now
When asked what they needed at this time, most were keen to get marketing help to attract more customers. Financial assistance was also a notable challenge.
Note: respondents were asked to select all that applied to their situation.
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Those who responded and answered all the questions in the survey included (15/42) trade suppliers, (13/42) related professional services such as bookkeeping, organizer, etc., (9/42) home renovators, (4/42) interior designers/decorators and (1/42) home builder.
As a recap, here are the four key findings in point form:
- Majority are negatively impacted, but some are doing okay
- Many feel they will be on track within the next 6 months (if not already)
- Uncertainty and finding clients are challenges
- Getting more customers and financial assistance are what they need now
The home building and renovation industry is one the has been hit hard by the current pandemic and local economic situation. It has caused uncertainty and a lack of clients. However, there are some businesses that have been continuing as usual. There is also some optimism in the fact that they feel things will resume in 6 months. And, more than anything, they need marketing and financial assistance to help them during this time.
Toni Guffei is a marketing strategist with Ratio Marketing Inc., a full-service marketing research, strategy and planning firm.