Report Shows Promising Outlook for Home Service Businesses Despite Economic Challenges

Report Shows Promising Outlook for Home Service Businesses Despite Economic Challenges

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Jobber, a leading provider of operations management software for home service businesses, recently released its latest Home Service Economic Report: 2022 Review and 2023 Outlook. The report features expert insights and proprietary data aggregated from more than 200,000 residential cleaners, landscapers, HVAC technicians, electricians, plumbers and more, who use Jobber.

"While no category has been fully immune to the turbulent economic times, home service has remained remarkably steady and resilient throughout," says Sam Pillar, CEO and co-founder of Jobber. "This is a category that does important work that people can't live without, contributes to the strength of local communities, and provides purposeful jobs to hard-working professionals. It's a combination of these factors that is attracting young adults, individuals seeking career change, and entrepreneurs to enter the category at a growing pace."

Filling the trades gap

Home service is showing positive signs of continued growth and resilience. The category provides essential services that will continue to be in demand, even during tough economic conditions. This resilience is attracting a steady pipeline of new entrepreneurs and individuals seeking to build careers in the home service category.

  • The next wave of entrepreneurs: New business formation applications in home service industries remain strong, with the volume of applications sustaining high levels set in 2020.
  • Starting a trade career: Technical and trade school enrollments are growing at high rates with the number of new apprenticeships reaching record levels in 2022.

Consumer demand remains strong

Despite economic headwinds and being measured against the exceptional performance of 2021, home service businesses witnessed steady consumer demand that will likely continue throughout 2023.

  • Growing revenue: Median revenue for service providers increased throughout 2021 and 2022, driven by higher invoice values. Similar trends have taken place during the first several months of 2023, which are expected to continue for the rest of the year.
  • Adoption of digital payments: The popularity of online payments surged during lockdowns in 2020 across the home service category and the behavior has stuck. Customers are increasingly wanting to pay with credit cards and service professionals are accommodating this modern expectation.

Overcoming rising costs

Inflation, rising interest rates, rising commodity prices, and rising wages, combined with low unemployment, have had a significant impact on material and labor costs. However, home service businesses continue to grow revenue.

  • Offsetting rising costs: Home service providers are breaking even due to the average invoice value rising approximately 10% year-over-year.
  • Supply chain stabilization: Over the past several years, a significant cause of the material cost increases can be traced back to supply chain disruptions. According to the Global Supply Chain Pressure Index, there has already been a significant improvement in the second half of 2022 and early 2023.

"We're seeing a trend of the home service category steadily moving forward despite the disruptions and challenges in the broader economy," says Abheek Dhawan, vice president of business operations at Jobber. "Demand for home services continues to stay strong, despite rising costs, demonstrating the potential for home service businesses to grow and persevere even in tough conditions. There continues to be an entrepreneurial opportunity within various home service industries, and the future looks bright for these resilient businesses."


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