As others struggle, home improvement industries soar

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With a record number of Americans working and studying from home, the home improvement industry has seen a burst of business, with customers seeking to spruce up their living spaces and tackle renovation projects they had been delaying for years.

For home remodeling and landscaping companies in Maryland, this has meant an unending — and almost unmanageable — stream of business.

Steve Klitsch, the owner of HIRE ME, LLC, in Germantown and the past president of the mid-Maryland chapter of the National Association of the Remodeling Industry, says remodelers across the state have been “swamped” over the past eight months.

“I can’t answer my phone fast enough for new business that’s coming in,” he says.

The influx of business has been so great that it has overridden other industry trends Klitsch usually notices. During a presidential election cycle, he says, business tends to decline between the last convention — in this case, the Republican National Convention, held the last week in August — and the day of the election.

Not this year. Business at HIRE ME LLC, was steady the whole way through. The projects his and other local remodeling companies are taking on aren’t small ones, either; the most popular in recent months have been kitchen and bathroom renovations, clocking in at prices up to $30,000 and $50,000 respectively.

In the landscaping industry, patios and decks have been the most high-demand items this year.

“It was the spring, summertime, people were stuck at home but they wanted to be outside and enjoy the nice weather,” says Aaron Raines, residential landscape manager for Live Green Landscape Associates LLC, and the president of the D.C., Maryland and Virginia Landscaping Contractors Association. “So they wanted to create some sort of an outdoor space. Maybe they (wanted to) work outside or have dinner outside (or) just get out of the house, because people were going stir crazy.”

Like the remodeling industry, residential landscaping has been bolstered by the pandemic — although, Raines notes, commercial landscapers have seen a decline in business. Because commercial properties are seeing significantly less traffic than they normally would, property owners aren’t opting to take on projects right now. 

“Companies have tried to reallocate employees or reallocate equipment or time slots … to whatever their busier division is,” Raines says, adding that such reallocations are typical even in a regular year, as companies often shift workers’ duties seasonally.

This year, though, business isn’t slowing down as the weather starts to get colder. Whereas ordinarily, people might wait until the spring to have a patio built, customers this year are starting projects in the winter due to several-months-long delays, in hopes of having them finished by the time it warms up again.

Data collected from 170 landscaping companies during the summer reflect these trends nationwide. National Association of Landscape Professionals’s mid-year check up reported that 60% of residential contractors are seeing revenues that exceeded their expectations for the year, while only 40% of commercial contractors said the same. 

For both residential and commercial landscapers, those increases were significant; more than half of the companies surveyed increased their revenues by at least 10%, with 13% reporting an increase of more than 25%. Those companies whose revenues decreased reported slightly less drastic shifts; 45% said their revenue had dropped by less than 10%, and 38% reported a drop between 10% and 25%.

While the National Association of the Remodeling Industry does not yet have revenue data available for 2020, its CEO, David Pekel, agrees that “demand for remodeling is exceeding capacity.”

This isn’t the first time a national recession has boosted some industries despite damaging most others. During the Great Depression, “the companies that sold shoes weren’t doing as well, (but) the shoe repair shops did great,” said Roland T. Rust, distinguished university professor and David Bruce Smith chair in marketing at the University of Maryland’s Robert H. Smith School of Business.

Rust notes that “artificial” boosts like this one rarely last long; he references the statistical concept of regression to the mean, which is the idea that things are more likely to return to normal than they are to continue being exceptional.

Raines agrees, anticipating that the increase in business that landscapers have seen this year will likely subside once the pandemic is over.

The remodeling industry, however, may continue to do well in the subsequent months and years, due to the effect that COVID-19 has had on the culture of working from home. Seeing the effectiveness of remote work in action, companies are downsizing their office spaces and entertaining the idea of continuing remote work even once it’s safe to return to the office. 

As workers begin to switch to working from home permanently, Klitsch says, he anticipates that remodeling companies will be taking on many home office projects, installing custom cabinets and shelves.

“I think that’s going to be a trend we’re going to see in 2021,” he says. “The remodeling boom will continue.”

Raines says landscapers have encountered a few problems caused by the pandemic. This year, there has been a labor shortage in the landscaping industry due to restrictions on international travel; many landscapers across the country, including in Maryland, are migrant workers traveling from central and south America. 

As of July, 84% of landscaping contractors were hiring, despite high unemployment rates across the country, according to the NALP report.

At Live Green Landscape Associates, that workforce has been primarily replaced with restaurant workers who were laid off from their jobs in the struggling hospitality industry. These employees typically aren’t as efficient at the work as the company’s usual pool of workers.

But, Raines stresses, that’s only a minor issue. 

“Long term, the biggest gripe I hear is, ‘we have so much work, we can’t even get it done. We’re booked out three months and normally we’re booked out three weeks,’” he says. 

“On the whole, it’s positive … more work on the books, scheduled, budgeted and ready to go — that’s never a bad thing for a contractor.”