Demand Down In Construction Industry As Homeowners Reduce Spending

New research from the find-a-tradesperson platform, Rated People has revealed the construction industry is heading for a ‘home improvement squeeze’ in 2023 as tradespeople continue to battle with rising costs and homeowner demand is down.  

Following the ‘home improvement boom’ where record numbers of homeowners improved their homes over the past few years – just 35% of homeowners are now definitely planning home improvements this year, which is a sizeable drop from 52% in 2022.  

The findings come from this year’s edition of the Rated People Home Improvement Trends Report which analysed 1.1 million home improvement jobs posted through the Rated People platform by UK homeowners to uncover the impact of the cost-of-living crisis on tradespeople and homeowners. 

The price of materials and operational costs have increased substantially over the past two years, and the vast majority of tradespeople have needed to pass these costs on to homeowners to stay in business.  

In 2022, 94% of UK tradespeople experienced rising costs, and this year, 92% of tradespeople say their costs are increasing further.  

This has made home improvements less affordable for homeowners who are already struggling with the wider pressures of the cost-of-living crisis. This year alone, 86% of tradespeople are reported to be raising their prices for homeowners, and on average tradespeople are increasing their prices by 17%. 

As a result, almost three in four (71%) tradespeople expect to have work drop out this year and 77% think homeowner demand will reduce.  

Gardeners and landscape gardeners are the trade that’s preparing for the biggest reduction in demand, with a full 100% saying they expect to have work drop out. Nine in 10 (88%) bathroom fitters expect they’ll have less work this year and 78% of handypeople think their pipeline will shrink. 

Top 12 trades that expect to have work drop out in 2023 because of rising prices :

By analysing Government price indices for building materials and compounds over the past two years, Rated People has revealed that of the top materials that saw the biggest price rises last year, the price of steel and concrete saw the biggest rise. 

The price of concrete reinforcing steel bars was 44% higher on average in 2022 when compared to 2021. Fabricated structural steel saw a 34% average increase and the cost of pre-cast concrete products was 26% higher in 2022 than the year before.  

Top 10 construction materials that saw the biggest average year-on-year price rises:

Around one in three (29%) tradespeople are investing in marketing and advertising this year to pull in more business from the work that’s available. They’re also looking to expand their businesses to offer more services, improve their website/ social channels, potentially reduce prices where they can and expand into different locations. 

Top 10 ways tradespeople are attracting more business in 2023:

Adrienne Minster, CEO of Rated People, said: “The big home improvement boom of past years was incredible for tradespeople. But now, with fewer homeowners able to have work done, 2023 is set to be a more challenging landscape for them to navigate. 

We’re committed to helping skilled tradespeople across the UK to weather the storm and find the work that’s available in their areas – as well as future-proof their businesses – as homeowners rein in spending.”