Consumer Confidence: What the Latest Homeowner Spending Trends Mean for Trades Businesses – and What to Do Now

For trades businesses that rely on homeowner demand, consumer sentiment is more than just a headline. It’s a real-world signal of how confident everyday Australians (i.e. your clients) feel about spending money on renovations, repairs, and upgrades.

When sentiment is strong, homeowners are more likely to invest in new kitchens, outdoor areas, or energy-efficient upgrades. When confidence dips, they tend to delay non-essential work or seek cheaper quotes.

That’s why understanding these trends is critical for trades business owners who want to stay ahead of the curve.

As business coaches who work with tradies, we know that consumer sentiment doesn’t just affect demand for your services of electricians, plumbers, landscapers, HVAC and renovator builders. It shapes how homeowners respond to quotes, how they prioritise projects, and how they engage with your brand.

With the practical thinking, trades business owners can turn these insights into smarter strategies that protect your margins and keep your pipeline flowing.

Summary of the Consumer Sentiment Report – What Tradies Should Know

Consumer Confidence Has Fallen

The nerdy stats: the Westpac–Melbourne Institute Consumer Sentiment Index report (monthly report for October) decreased by 3.5 percent, falling to a value of 92.1, which represents its lowest point in the past six months.

The index has now completely eroded the gains it had previously made between the months of May and August, during which period interest rate cuts had temporarily boosted consumer confidence and lifted spirits in the community.

What that means for tradies: This decline is a clear indication that consumers are feeling less optimistic about the overall strength of the economy as well as their personal financial situation going forward.

Households Feeling the Pinch

The biggest decrease was in how consumers perceive their family finances over the upcoming twelve months. This particular mark of confidence declined by nearly 10 percent, falling to a value of 97.1, which represents the weakest level in over a year.

Additionally, current assessments (how people are feeling right now) have also seen a downward trend, indicating that the effects of previous rate reductions and tax cuts are gradually diminishing.

What that means for tradies: Homeowners are becoming more cautious with their spending, which in turn influences how they feel about spending money on non-essential trades and services.

Interest Rate Uncertainty

Inflation updates have been causing concern among consumers, leading many to now expect that interest rates will rise once again in the near future.

Prior to the Reserve Bank of Australia’s decision in September to keep interest rates unchanged, more than half of the respondents surveyed believed that mortgage rates would increase shortly.

What this means for tradies: This uncertainty consumers have about future interest rates is creating caution among homeowners, especially when it comes to spending on discretionary items such as landscaping, pool installations, or major home renovations.

As a result, many are holding back on these kinds of expenses until there is more clarity about where the interest rates are going.

Stable Job Outlook

Interestingly, consumers are not worried about their jobs at the moment. The Unemployment Expectations Index has dropped slightly, which indicates that most Australians still feel quite secure in their employment situation.

Because people still have confidence in their job security, this confidence can help sustain economic activity even during periods of caution.

What this means for tradies: This is good news for trades businesses, as it suggests that while spending might slow down a little, it is unlikely to come to a complete halt.

House Price Optimism

Despite the broader pessimism in the housing market, expectations for house prices have unexpectedly reached a 15-year high. More than three-quarters of consumers now anticipate that house prices will increase over the course of the next year, with a particularly strong optimism observed among residents of Queensland.

Such positive expectations might influence market activity and property development trends.

What this means for tradies: This optimism about house prices could stimulate demand for value-adding renovations and upgrades, especially among homeowners who are considering selling their properties or refinancing existing mortgages.

Related article: Economic signals for small-medium businesses in Australia | June 2024

Practical Insights, Advice and Actions from our Business Coaches

Adapt Your Marketing and Lead Generation to the Current Vibe

In a cautious market, trades businesses need to double down on trust and value. Your marketing should focus on practical benefits, long-term savings, and quality workmanship.

In coaching we’re using homeowner testimonials, before-and-after photos, and educational content that positions your business as a reliable partner.

Action for tradies: Don’t just advertise services; show how you solve problems and deliver peace of mind.

Why this works: This approach will help build stronger relationships with your customers and differentiate your business from competitors by demonstrating your commitment to quality and customer satisfaction. Consistent messaging highlighting your expertise and dedication will ultimately lead to increased customer loyalty and a better reputation in the marketplace.

Quoting and Pricing Strategy

With households watching their budgets carefully, quoting needs to be a strategic activity. Do NOT rush into offering the lowest possible prices just to attract customers.

Action for tradies: Instead of lopping of the top, consider providing tiered options that give homeowners more control over the scope of work and their spending.

Emphasise the importance of cost transparency, detailed warranties, and the long-term value your services can deliver.

Another option is bundling services together or offering seasonal promotions to keep your quotes competitive, all while maintaining healthy profit margins.

Why this works: This approach helps you build trust with customers and positions your business as a transparent and value-focused provider.

Equipment and Capital Purchases

Now is the optimal time to be very selective and cautious when it comes to making capital investments such as long leases, big equipment or machinery purchases unless doing it will directly improve your business’s efficiency or help open up new revenue streams.

Action for tradies: Use your financial model to test different “what if” scenarios such as equipment utilisation, running costs, demand, recovery rate you could expect.

Why this works: At Tenfold every business coach reviews the return on investment projections to preserve your cash flow. Your financial model is an important tool to assess strategies that can help you deliver work that hits your profitability targets.

Recruitment and Workforce Management

With job security being stable, trades businesses may still find it challenging to recruit new staff members. However, you shouldn’t rush into expanding your team unless there is clear demand to justify it.

Action for tradies: Cross-train your existing staff members and if you do decide to hire new staff, look for multi-skilled workers who are capable of working across various projects and functions (e.g. A-grade on the tools who can also be leading hand when needed).

Why this works: Increases flexibility and efficiency within your workforce model. Also supports retention of your existing staff.

And while you’re at it, review your scheduling systems to improve workflow and job management.

Tip: Communicate with your team about current market conditions and your overall business goals. It’s your business big picture but they’re the ones helping you paint it.

Conclusion: Stay Strategic and Ready for the Upswing

While consumer confidence has taken a hit, tradies don’t need to panic. By being smart, communicating messages clearly to customers, and maintaining a strong focus on delivering value, you can continue to attract high-quality leads and deliver profitable work.

The fundamental health of the Australian housing market remains resilient, and overall sentiment is expected to rebound over time.

At Tenfold our business coaching for tradies goes further than reading the headlines – we keep you accountable to being proactive so you stay ahead of the pack and position your business to take advantage when the market begins to improve.

Remember that challenging times are often temporary, and with the right mindset and strategies in place, your business can emerge stronger and more competitive in the long run.

This is the time to lean into next level business coaching.

FAQs for Trades Business Owners

What should I do if leads slow down?

Focus on re-engaging past clients, improving your online presence, and offering helpful content that builds trust. A Tenfold business coach can help you refine your messaging and target the right audience.

Should I lower my prices to win more jobs?

Not necessarily. Instead, offer flexible quoting options and highlight the value you deliver. Dynamic pricing strategies can help you protect your margins while staying competitive – speak with a Tenfold business coach about smart pricing models for your business.

Is now a good time to invest in new equipment?

Only if it improves efficiency or opens up new revenue. A financial model that includes the costs for your unique business can help you assess ROI and explore alternatives like leasing.

How do I manage my team if work slows down?

Communicate clearly, cross-train staff, and focus on retention. Next level business coaching includes workforce planning that aligns with demand.

Can I still grow my business in a low-confidence market?

Absolutely. Growth is possible with the right strategy. Business coaching services can help you identify opportunities, streamline operations, and build a stronger business.