I’m excited to share that this week we launched the Houzz Barometer, a quarterly industry research program covering the U.S. residential renovation, building and decorating markets. More than 5,000 U.S. residential service providers have joined the Houzz Industry Panel to participate in the research program. The critical aim of the research is to track national and regional trends at companies along the entire value chain of the U.S. residential home renovation, building and decorating markets.

The insights generated from these efforts should provide individual professionals on Houzz with a better sense of how their businesses compare with those of their peers, collaborators, subcontractors and vendors. Additionally, homeowners, media, government and others may use the Houzz Barometer insights to derive implications for the health of the larger economy.

This first Houzz Barometer study generated a number of timely and relevant insights into market performance in 2014 and the outlook for 2015. Additionally, Houzz released its first quarterly index of industry confidence in the home renovation market for the last three months of 2014 and the first three months of 2015.

Here are the Key Houzz Barometer findings:

 – 2014 was a strong year, delivering high single-digit to healthy double-digit revenue growth, meeting or beating expectations for a large majority of firms providing goods and services to the home renovation, building, and decorating markets. Overall, industry revenue growth was fueled by improvements in both the number and the scale of new projects or orders.

 – Economic recovery is reaching very small firms (i.e., firms with fewer than 5 employees). Overall, revenues are improving for firms of all sizes, with a particularly even recovery in the construction sector. Many smaller interior designers, landscape professionals, builders/remodelers, specialty trade and other industry firms report aggressive rates of growth (50+ percent annually), and roughly a third hired new employees in 2014. Smaller residential architects saw more moderate growth rates, but similar hiring trends.

– Looking forward to 2015, firms in the Houzz community continue to be bullish about their expectations for 2015. Many more firms expect revenues and profits to increase in 2015 than those reporting increases in 2014. The expected rates of growth continue to be in the high single to healthy double-digits in 2015, with an observed shift toward more moderate growth expectations than in 2014.

 – Key concerns are top of mind among firms, including the shortage of qualified workers and subcontractors, the shift toward a budget-conscious and commitment-phobic homeowner, and a continued sense of uncertainty about the U.S. and world economic and political climate.

 – The inaugural Houzz Renovation Barometer posted a reading of 74 or higher for each of the six industry groups in the last three months of 2014, pointing to strong year-over-year improvement in the home renovation market. Widespread optimism in the market recovery continues into early 2015, with the Q1 2015 Houzz Renovation Barometer showing a year-over-year reading of 75 or higher for each industry group.

Note, the Houzz Renovation Barometer is calculated as a diffusion index, where an index score above 50 indicates that more firms report an increase than a decrease in the business activity related to existing homes in a given quarter (e.g., compared to the prior quarter).

For more information on the study and the Houzz Renovation Barometer, see the study highlights and study white paper.