We’re halfway through a year that’s been altered by a historic pandemic. One that’s forced small businesses to pivot, adapt, and in some cases, reinvent themselves completely to survive and serve their communities.
We believe that spirit of resourcefulness and resilience is precisely what’s helped home service businesses weather the storm of COVID-19, all while providing essential jobs and services to keep our communities safe, comfortable, and functioning.
In May, we looked at data from tens of thousands of home service professionals to understand just how COVID-19 was affecting their business’ revenue and new work booked.
Now, as restrictions lift and the economy reopens, we’ve expanded that data to include how the home service businesses are performing relative to other business types, and the impact of COVID-19 on employment rates.
While each industry and individual has experienced this pandemic differently, we hope that this data can help you understand where the trends are headed, so you can make more informed decisions for the health of your business.
Here’s what we’re seeing.
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1. Home service businesses prove their resilience in times of crisis
Every single business has been impacted by the effects of COVID-19. With a few exceptions, the majority of those businesses saw revenue drop sharply— some, such as clothing, declined by as much as 87%.
The home service category, however, has proven to be resilient to economic downturns, even at the peak of the crisis.
Using U.S. Census Bureau data, the following chart compares revenue growth across major consumer categories.
While home service businesses did see year-over-year revenue decline by 18% in April, the category remained relatively stable compared to others, and as of June, has returned to pre-pandemic figures.
Revenue Comparison Year-Over-Year
2. Home service businesses power communities and careers
In April, unemployment shot to a record high of 14.7%, largely as a result of COVID-19 related layoffs.
To assess employment in the home service category, we looked at data from the U.S. Bureau of Labor. Two categories from their report represent the home services: Services to Buildings and Dwellings and Specialty Trade Contractors.
Similar to revenue growth, employment across all categories, with the exception of Food and Beverage Stores, dropped sharply in April. However, home service businesses were once again impacted less.
Employment Comparison Year-Over-Year
Thanks to the essential, stable, and meaningful nature of home service work, home service businesses have been able to provide jobs to millions of Americans throughout the pandemic, all while maintaining the comfort and safety of their communities.
After a moderate decline in employment in April, there has been a significant improvement in May and June as the economy has started to re-open across the country.
3. The revenue rebound continues
At the end of May, we saw a noticeable rebound in new work scheduled and median revenue earned for home service businesses. All through June, that trend continued.
We broke down the data into three segments to better understand the impact of the pandemic on different kinds of businesses.
The segments are cleaning, contracting, and green businesses.
The cleaning segment, which includes residential and commercial cleaning businesses, window cleaning, pressure washing, and carpet cleaning, saw the sharpest decline of all three segments.
Unlike plumbing or electrical work, cleaning services are largely considered non-essential, and most are performed indoors, where it’s harder to socially distance.
Since May, however, the cleaning industry has seen a dramatic increase in new work scheduled— and changing consumer behaviors that may shape the industry for years to come.
As more and more homeowners and businesses recognize the value of cleaning services to keep our interiors clean, comfortable, and safe, demand for cleaning and disinfecting services is on the rise.
With new work scheduled rebounding positively, revenues for this segment should return to a positive trend at the start of Q3 and beyond.
Cleaning Businesses: Changes in New Work Scheduled Year-Over-Year
Cleaning Businesses: Changes in Median Revenue Year-Over-Year
The contracting segment consists of industries such as construction, electrical, plumbing, and HVAC.
Several industries within this segment were designated as essential throughout the country, which allowed many of these businesses to continue working even as others were forced to pause operations.
Still, new work declined by 23% year-over-year in April, and revenue growth fell by 15% — roughly 25% below where contracting businesses were expected to be.
The good news: new work scheduled quickly turned around in May, and spiked up to an annual record of 14% year-over-year growth in June.
Contracting Businesses: Changes in New Work Scheduled Year-Over-Year
Contracting Businesses: Changes in Median Revenue Year-Over-Year
As homeowners spend more time than ever at home, they may be more inclined to invest in home projects they’d been putting off, or in need of repairs as appliances, furnaces, and fixtures get more wear and tear than usual.
This turnaround is faster than what the cleaning segment has seen, and it’s impressive to see contracting businesses overall return to pre-COVID levels within two months. As new work scheduled continues to improve, this segment is well-positioned entering Q3.
Finally, the green segment includes lawn care, landscaping, tree care, and other related outdoor services.
Although also affected, Green businesses have fared relatively better during these times, presumably because:
- The ‘essential’ classification of these businesses varied by state when stay-at-home orders were implemented
- Most of their work tends to be outdoors, where social distancing guidelines are easier to follow
- Spring is the green industry’s busiest season
- More homeowners are investing in lawn care, tree care, and landscaping work to improve their outdoor living spaces.
Revenue growth has already rebounded back to pre-COVID levels of 10% year-over-year in June. As these businesses enter Q3 with more new work than they expected, they’ll also be poised well for positive revenue growth.
Green Businesses: Changes in New Work Scheduled Year-Over-Year
Green Businesses: Changes in Median Revenue Year-Over-Year
What comes next?
Four months into the COVID-19 pandemic, our data shows significant growth and improvement for home service businesses.
But these uncertain times are far from over.
Many major categories continue to experience historic losses, which will impact consumer spending habits and overall economic opportunities.
It’s hard to predict how long it will take for the unemployment rate to return to normal levels, as businesses across all categories start redefining how they operate.
The home service category, however, has demonstrated resilience and resourcefulness, allowing many businesses to weather the storm and pull themselves back up into positive year-over-year growth.
We’ll continue to monitor and update the data as the year progresses.
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