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Home Service Businesses Demonstrating Resilience During Economic Slowdown

by News7

TORONTO, CAN — Jobber, the leading provider of operations management software for Home Service businesses, today released its latest Home Service Economic Report: 2023 Q1 edition. The report features expert insights and proprietary data aggregated from more than 200,000 residential cleaners, landscapers, HVAC technicians, electricians, plumbers, and more, who use Jobber.

“While no sector has been immune to the recent global economic turmoil, the past and present performance of businesses across Home Service demonstrates their ability to rapidly adjust and maintain positive revenue growth,” said Sam Pillar, CEO & co-founder of Jobber. “Since many of these businesses provide essential services, they are far less impacted by market conditions. The future outlook for this sector remains bright.”

Predicting Future Performance

Recessions and economic slowdowns impact industries differently. For the first time, the report investigates how home service businesses performed during previous economic disruptions to predict future performance. The report found that:

While home maintenance spending remains stable regardless of the economy, home improvement spending shows higher growth but with more volatility.During economic slowdowns, discretionary spending slows while replacement spending is more resilient in both minor and major recessions.Defying Global Market Conditions

While economic factors and recessions have impacted many industries in Q1 2023, the Home Service category has continued to demonstrate resilience in the face of economic slowdown.

Staying Steady: Median revenue growth is slowing, but still increased by approximately 3% in March relative to last year, which was a historically high growth year.Big Picture: On a two-year compound annual growth rate (CAGR), median revenue grew between 10-20% from Q1 2021 to 2023, which is quite healthy.Revenues Continue to Rise

Q1 2022 experienced exceptionally strong growth in year-over-year revenue, with a 20-30% jump as the economy continued to rebound from the pandemic. Even when compared to this phenomenal quarter, Home Service businesses across all segmentsGreen, Cleaning, Contracting, and Constructionin Q1 2023 have successfully maintained positive year-over-year revenue growth.

Green: The Green segment, which includes lawn care, landscaping, and other related outdoor services, experienced Q1 revenue growth of around 5-10%, which bodes well as it enters the busy summer season.Cleaning: Median revenue growth stayed positive for the Cleaning segment, despite a decline in new work scheduled in the months of February and March after a positive January.Contracting: Contracting, which includes electrical, handiwork, HVAC, plumbing, and other non-construction services, leveraged increased pricing power to generate year-over-year revenue growth of 12% in January, before flattening in February and March.Construction: Construction businesses grew revenues in the first quarter year-over-year, despite a decrease in new work scheduled.

“While we anticipate home maintenance spending to remain steady throughout the remainder of this year, home improvement spending may experience more volatility,” said Abheek Dhawan, VP, Business Operations at Jobber. “Despite fluctuating demand, Home Service businesses are adapting to the shifting macroeconomic environment by leveraging increased pricing power in line with inflation to maintain revenue growth. Based on the historical performance during past recessions, we predict that the future for the category will remain positive regardless of economic uncertainties.”

To read or download the Jobber Home Service Economic Report: 2023 Q1 edition, visit: https://getjobber.com/home-service-reports/may-2023

Source : ContractorMag

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