If you’ve been in the sector for more than a decade you may have experienced The Great Recession of 2008. It lasted for five quarters and was the deepest UK recession since the Second World War.
Research from the US during the same period, showed that replacement projects and system upgrades such as windows, roofing, cladding, facias, air conditioning etc held up better than spending on discretionary projects, such as structural changes, new rooms, kitchens and bathrooms. Smaller-scale projects also held up better than larger ones and DIY activity became a larger share of spending in many project categories as consumers took on some of the jobs themselves.
That said we don’t have to look as far back as 2008 for a recession, because the UK was officially in a recession in Q1 & Q2 of 2020 during the pandemic, the start of a very buoyant time for home improvement businesses. After a period of unprecedented demand, with a recession looming, more options for consumers to spend their money on, it makes sense that demand will slow considerably. Add to this the continuing rising of material costs home improvement businesses may well be in the unenviable position of having to raise costs for a customer base that is tightening its belt.
Certainly not the ideal scenario, that said even if the home improvement sector shrinks over the next 12-24 months by 20%, the market for contracted out home improvements will still be worth approximately £17bn (down from a high of approximately £21bn in 2021). Also even with further interest rate increases forecast, the cost of borrowing is still relatively cheap, so borrowers may want to take advantage of the lower rates before more hikes add further cost to home improvement projects.
Whatever the future brings, to stay competitive and relevant in a changing market, you’ll need to be agile and explore new ideas that are relevant to changing consumer needs. Obviously whatever your ideas, how you execute communication and marketing will be pivotal.
If you need help with your strategy during what could be a challenging period lets chat. At the very least you might get some ideas that will help formulate your plans or give you new ideas.
Articles mentioned :
Family spending workbook 1: detailed expenditure and trends – https://www.ons.gov.uk/peoplepopulationandcommunity/persoalandhouseholdfinances/expenditure/datasets/familyspendingworkbook1detailedexpenditureandtrends
Building.co.uk : How the recession changed the pattern of spending on home improvements