Why The Top Home Improvement Franchises Are Recession Resistant
While the near-term economic forecast doesn’t look great, the top home improvement franchises aren’t particularly worried. This article explains why.
The United States, like the rest of the world, is dealing with high rates of inflation currently. The causes of this are numerous and complex, but a near-universal response to inflation is for governments to raise interest rates, which is what the US Federal Reserve has done, repeatedly. Many economists agree that this is an appropriate response to inflation, but it can contribute to a recession, which might occur in 2023.
Recessions happen. They come and go. The reasons why and who’s responsible are for economists to debate, but if you’re interested in running your own business, you want a business that’s recession resilient. A sufficiently bad recession can hurt everybody, but some businesses can enjoy demand for their products or services even when budgets are tight for Americans. Some of these are staple products. People need to buy bread, toilet paper, and other essentials, so demand for products in these sectors often remains stable. Other businesses can retain high demand in poor economic times for other reasons.
Home improvement businesses are largely recession resilient. At least, the top home improvement franchises are. This may seem counterintuitive at first. Home improvement jobs can be expensive for many families. If they’re worried about inflation or job security, will they really go forward with a home remodel?
Many won’t. We can reasonably expect demand for home improvement jobs to decline from the almost unprecedented highs we’ve seen since the middle of 2020. But this demand doesn’t appear poised to dip dramatically.
Because interest rates are high, mortgages are now more expensive. Somebody who was considering purchasing a home in 2021 might now be reconsidering. What many people are choosing to do is to remodel their current homes instead. Most remodels cost a lot less than buying a new home, they can increase the value of your home, and you don’t necessarily have to take out a loan to pay for a remodel and even if you do, it’s hardly comparable to a mortgage.
The home design website, Houzz, recently published a survey showing that 37% of homeowners completed a remodeling project in 2022, and that about 25% expect to complete one in 2023. However, people might be picky about who they hire for these jobs. The top home improvement franchises have reputable names that people trust.Back