A March 2023 Home Service Economic Report by Jobber reviewed the 2022 home service economy and made predictions regarding the outlook for 2023. The report struck an optimistic note as it cited three trends: rising costs, persevering consumer demand and long-term resilience.

Although growth in the home services industry was flat in 2022, high growth during the previous year raised the two-year compound annual growth rate by 15%. And because prices have significantly increased, revenue has as well.

Prices for gasoline and for commodities such as HVAC equipment and steel products saw price increases of 100%—or more—year-over-year, but have slowed considerably more recently. These prices impacted some industries more than others, with construction being one of the leading areas affected.

Hampered in recent years by the pandemic, supply chain issues and labor shortages, the home service industry now faces inflation and rising material costs and wages. Service pros have overcome some of the issues by passing along price increases (with prices expected to continue rising), but they continue to struggle with labor shortages and labor costs.

Changing conditions have alleviated other challenges. As the world has emerged from pandemic restrictions, supply chain problems have eased, according to the Federal Reserve Bank of New York’s Global Supply Chain Pressure Index. By raising the interest rate, the Federal Reserve has slowed inflation.

The Leading Indicator of Remodeling Activity, which offers a short-term outlook of national home improvement and repair spending to owner-occupied homes, has shown consistent growth through the pandemic years, according to a report by Harvard University’s Joint Center for Housing Studies that examines key economic indicators that influence remodeling activity. While that growth is expected to continue in 2023, it’s predicted to occur at a decreasing rate. Nevertheless, home service businesses are resilient and have outperformed other segments of the economy.

That could be due in part to the fact that the services provided by home service professionals are considered essential and demand for them is practically guaranteed to continue, no matter what shape the economy is in. For example, during 2020’s pandemic lockdowns, interest in trade careers and businesses increased. As restrictions lessened, interest remained at elevated levels.

Portending a bright future for the home service industry, Jobber cites statistics from the Department of Labor and the U.S. Census Bureau indicating that technical and trade school enrollment is increasing at high rates and that new apprenticeships reached record levels in 2022. Furthermore, new business formation applications in contracting, green and cleaning businesses are sustaining the high levels set in 2020.