Its reliance on the housing market did not serve this industry well during the recession
Los Angeles, CA (PRWEB) August 24, 2012
Known as the jack-of-all-trades, operators in the Handyman Service Franchises industry provide residential and commercial clients with a broad range of repair and maintenance services. These services extend from painting projects to drywall repair, plumbing work and electrical system repairs, to name a few. The industry derives the majority of its demand from the residential sector from both homeowners and property managers. As a result, the industry was adversely affected as the housing market entered into its worst downturn since the Great Depression. With homeownership rates declining, skyrocketing foreclosures, and slumping housing prices, demand for reinvestment in housing repairs and maintenance dropped steadily from 2008 to 2010. The industry also faced greater competition from do-it-yourself homeowners as a result of shrinking household budgets during the recession. However, revenue declines were only moderate because demand for minor household maintenance and repairs, which are typically more stable compared to discretionary remodeling work, according to IBISWorld industry analyst Caitlin Moldvay. Over the five years to 2012, industry revenue decreased at a moderate 1.9% to an estimated $2.4 billion.
In the past two years, Handyman Service Franchises industry revenue turned the corner, benefiting from the slow rebound in per capita disposable income and the recent increase in existing home sales and housing prices. Since 2010, per capita disposable income has grown at an average annual rate of 1.0%. Moreover, in the past year both existing home sales and housing prices have begun to rebound, driving increased household investment in maintenance and repair projects to increase selling values. The industry also benefited from tax credits offered to homeowners to invest in energy-efficient upgrades to windows, doors and HVAC systems, which resulted in greater demand for installation services provided by the industry. In 2012, industry revenue is expected to rise 3.5%, Moldvay says.
Over the next five years, revenue for the Handyman Service Franchises industry is projected to rise. The industry will primarily benefit from the rebound in the housing market, as rising existing home sales and increased housing prices will drive demand for remodeling and maintenance work to increase home selling prices. Furthermore, increased purchases of foreclosed homes on the market will also drive demand for maintenance and repair work provided by handyman service franchises. The Handyman Service Franchises industry has low market share concentration, with the top four players accounting for less than a quarter of industry revenue in 2012. Many handyman service franchisors are regionally operated. For example, industry player ANDY OnCall primarily operates in the Southeast region, with locations in Alabama, Florida, Georgia, Kentucky, North and South Carolina and Tennessee. However, market share concentration is expected to increase over the five years to 2017 as national franchisors respond to growing demand for industry services and expand franchise establishments. For more information, visit IBISWorld’s Handyman Service Franchises in the US industry report page.
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IBISWorld industry Report Key Topics
The industry includes franchised businesses that provide general maintenance and repair services to both residential and commercial customers. Types of services performed by industry operators include plumbing and electrical repairs and maintenance, appliance installation and repair, painting, carpentry, drywall repair and other repair, removal, maintenance and installation services. This report focuses solely on the operation of franchises and excludes non-franchise data.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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