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Construction firms reported a Q3 rebound, and their expectations for Q4 reached their highest level since early 2022, according to Houzz’s industry barometer. Fuel costs, borrowing expenses and clients’ financial caution remain obstacles for construction and design businesses.
Construction firms entered Q4 2026 with stronger expectations after activity rebounded in Q3, according to Houzz Inc.’s Q4 U.S. Houzz Pro Industry Barometer. The survey also found that fuel costs and cautious clients continue to weigh on construction and design businesses, with many prospective customers delaying commitments over economic conditions, finances or borrowing costs.
Houzz said the construction sector’s Recent Business Activity Indicator rose above 50 in Q3, the threshold indicating that more firms reported rising activity than falling activity. It described the result as a rebound following softer business activity earlier in the year. The report says construction professionals’ expectations reached their highest level since early 2022; it does not provide a specific score in the supplied material.
Cost pressures remained widespread. In Q3, 89% of construction firms and about 74% of design firms said fuel costs affected their businesses. The reported responses included higher supplier delivery charges, cited by 53% of construction firms and 42% of design firms; raising prices or adding fuel surcharges, cited by 46% and 31%, respectively; and absorbing costs through lower margins, cited by 44% and 24%.
Firms also described what helps turn a potential job into a signed project. The speed and clarity of estimates or proposals were cited by 64% of construction firms and 56% of design firms. Reviews, references or past work were another factor, as were clients settling project scope and budgets. Design firms also pointed to project visuals. These are survey responses about factors firms say influence decisions, not measures of how many proposals converted into contracts.
Costs and Caution Shape Project Decisions
The reported rebound suggests that construction businesses may be seeing more activity after a weaker period, but the survey does not establish that growth will continue through Q4. The gap between improved construction expectations and persistent operating pressures matters to contractors, designers and suppliers planning workloads, pricing and staffing for the final quarter.
For customers, the findings point to practical constraints on project timing and budgets. Firms said clients most often held back while weighing economic conditions or their personal finances: 59% of construction firms and 60% of design firms cited that factor. Higher interest rates or borrowing costs were also frequently reported as a financing issue, suggesting that customer demand can remain tentative even when businesses report better activity.
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Q3 Rebound After Softer Activity
The figures come from the Q4 2026 U.S. Houzz Pro Industry Barometer, as described in a report by Hardware Retailing. The survey covers construction and design professionals and asks about recent business activity, expectations, cost pressures and client decisions. Its Q3 activity measure and Q4 outlook refer to different periods: the former describes reported recent conditions, while the latter reflects expectations.
Houzz’s Marine Sargsyan, head of economic research, characterized construction professionals as optimistic following a prolonged period of slow activity, while describing design firms as more measured but cautiously optimistic. The supplied report gives selected survey results but does not state the sample size, field dates or full indicator values, limiting comparisons beyond the periods and figures it explicitly identifies.
“Construction pros are closing out 2026 with optimism, as expectations reach their highest level since early 2022 following a rebound from a long stretch of slow activity. Design firms are more measured, though cautiously optimistic.”
— Marine Sargsyan, head of economic research at Houzz
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Outlook and Survey Detail Limits
The survey reports expectations, not confirmed Q4 results. It is not yet clear whether the Q3 construction rebound will persist, how design activity will perform, or whether fuel and borrowing costs will ease. The supplied report also does not include the barometer’s exact activity and expectation scores, survey sample size or field dates.
The percentages describe what surveyed firms said affected their businesses or clients. They do not establish that fuel costs, interest rates or any single client concern caused a specific change in activity. The material also does not give a geographic breakdown or enough detail to determine how representative the responses are of the entire U.S. construction and design industries.
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Q4 Results Will Test Expectations
The next key development will be whether the stronger construction outlook translates into reported activity during the final quarter. Later barometer results could show whether the rebound continued and whether design firms’ more cautious expectations changed. For now, the report offers a snapshot of Q3 conditions and professional expectations rather than a confirmed account of Q4 performance.
Until those results are available, businesses and clients will be weighing the pressures identified in the survey: fuel expenses, financing costs and budget decisions. Houzz’s findings suggest that clear proposals and a firm’s track record can support client decisions, but they do not indicate how many projects will ultimately proceed.
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Key Questions
What did Houzz report about construction activity?
Houzz said construction’s Recent Business Activity Indicator rose above 50 in Q3, meaning more surveyed firms reported increased activity than decreased activity. The report characterized this as a rebound after softer activity earlier in the year.
How optimistic are construction and design firms for Q4?
Construction expectations reached their highest level since early 2022, according to Houzz. Design firms were described as more measured but cautiously optimistic. These are expectations, not confirmed Q4 results.
How are fuel costs affecting firms?
Fuel costs affected 89% of surveyed construction firms and about 74% of design firms in Q3. Firms reported paying higher delivery charges, raising prices or adding surcharges, and absorbing costs through lower margins.
Why are clients delaying project commitments?
Firms most often said clients were weighing economic conditions or personal finances. Other reported reasons included comparing bids and settling project scope or budgets. Higher interest rates or borrowing costs were the most frequently cited financing issue.
Does the report confirm that the industry will keep growing?
No. The barometer reports a Q3 activity rebound and Q4 expectations, but it does not confirm future growth. Whether activity remains stronger in Q4 is still unknown.
Source: rss
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