Demand in the home improvement sector is very high right now. Perhaps at record highs for some companies. Since the start of this huge bounce-back, which originated in mid-May of 2020, the debate has since been about predicting when things might end.
The answer might be a lot longer than we thought.
High home improvement demand
When we first came back to work, people thought the bounce-back might last a few weeks, maybe a couple of months. Wrong. Then when furlough was to be wound down. Wrong. Then by the end of the year. Wrong again. Basically any prediction about when the end of the home improvement boom has been wildly wrong so far, and it could be that we’re all thinking far too short term.
In a letter to fabricators from a systems company that I got hold of, informing them of market conditions that we already know about and the extra surcharges that are having to be implemented, one prediction was that there are signs that we’re at the start of a three-year cycle of much higher demand for home improvements. The letter didn’t state what the conditions were for that prediction, or whether the year we have just worked since last May counted as the first of these three years, but if this prediction is true, we could be looking at demand remaining at this level, or higher, until 2023 or 2024!
I assume most reading this have welcomed that with two distinct feelings. One is that we never have to worry about income for the next long while. The other perhaps panic and dread, considering the state of the supply chain at the moment and the crippled structure of it. But if this prediction is correct, then we’re in for a very long hard slog.
So what could be the reasons for this three year cycle? One factor could be foreign travel. It looks this year that trips abroad are firmly off the table. The prospect of any vacations away from the UK will likely be into 2022 at the earliest. But demand could still remain constrained due to the traffic light system and the cost for testing. If this keeps demand depressed for vacations it would mean more disposable income for other big-ticket items like home improvements.
Another factor is that business may well be pondering whether the pandemic has caused a more fundamental and permanent shift in people’s spending priorities. After spending so much time at home, it’s likely the public are looking at their houses and wanting to give them as much love as possible, improving them as best they can.
A third could be house prices. We know that house prices are skyrocketing, which is now not only putting them out of reach for first-time buyers, but also those who were thinking of moving but might now not be able to afford it. There may be a swathe of the public who decide to stay where they are and improve what they already have.
Fourth could be a protracted sales pipeline due to material constraints. The construction sector has already warned that the delays in getting hold of raw materials are already going to put back completion dates of projects. Meaning the recovery may well be dampened, but also lengthened as a result.
These are just a few reasons, and there will be many more. But if we are going to be in this particular period for years, and not months, then there are going to have to be some serious changes and investment.
Find ways to scale up
We cannot continue as we are. Too many people I talk to, including myself, are burned out, stressed, pissed off and working far longer than they should be. That isn’t sustainable and the industry is already suffering on the customer service and product quality as a result.
If the sector is going to ride out the home improvement wave better in the coming years, we’re going to have to invest. And not just pledge to invest, but put actual hands in actual pockets and start spending money on recruitment, apprenticeships, skills, machinery, quality control, warehouse space, environmentally friendly policies etc. We need to spend money on what is going to help reduce the workload, remove the pressure, even extend lead times if necessary. But right now the workforce is tired, it cannot take on any new B2B customers generally, which is not a long term position anyone wants to take.
The positive here is that if there are years of bumper work to come, then all we need to do is get ourselves into a position to make the most of it. At the moment, we’re just about managing. Scraping by from week to week by our fingernails. That’s not how business needs to be done. We need to be scaling up, growing the workforce, bringing in better software, extra storage capacity and more to be able to make every penny we can out of this boom.
We do not want to look back in the years to come with regret that we didn’t do enough to make the most of this opportunity, so something like this perhaps only comes around once in a person’s career. It may never happen to me ever again, and I don’t want to come out the other side feeling like I have wasted an opportunity.
If we are to do anything in the next few months, it is to work on our businesses to make sure we can scale up to meet the challenge. Remember that what is happening is a positive, especially when you look at other sectors, but what we have to do better is find ways to manage ourselves and others better, so that we can make this period in our careers more rewarding and profitable.
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