Contractors optimistic about business growth despite economic uncertainty

In the United States, a recent survey by Morgan Stanley, conducted on May 6, 2025, has revealed a positive outlook among U.S. contractors regarding the economy and their business prospects moving forward. 94 general contractors, painters, and remodelers, along with 37 specialist painters, participated in this survey, which aimed to gauge their sentiment towards the housing market and its challenges. Despite acknowledging the current uncertainties in the housing market, a significant majority of respondents indicated that they foresee an uptick in business by the latter half of 2025, enhancing the overall economic environment. Many contractors reported a robust backlog of projects, which further strengthens their confidence in upcoming business opportunities. The focus on larger projects appears to be rebounding, with a notable absence of concerns regarding clients opting for smaller renovations. This shift may indicate a broader trend where contractors are anticipating greater investments in home improvements, likely driven by the aging U.S. housing stock, as over half the homes in the country are now over 40 years old. Home Depot, a major player in the home improvement retail sector, stands to benefit from this optimistic outlook. Following a statement regarding trade tariffs made by former President Donald Trump, Home Depot communicated its efforts to proactively manage its operations and maintain value for customers amidst economic fluctuations. CEO Ted Decker emphasized the necessity for renovations and maintenance on older homes, asserting that Home Depot is positioned to assist homeowners in undertaking these essential projects as the housing market begins to stabilize. Investor sentiment, as reflected by financial analysts such as Jim Cramer, has leaned towards maintaining a positive stance on Home Depot stock. Cramer pointed out that interest rates for 30-year fixed-rate mortgages remaining below a crucial threshold of 6.5% may stimulate housing activities, which could subsequently translate into increased sales for Home Depot. He also mentioned that professional sales have recently outperformed do-it-yourself sales, underscoring a shift towards larger-scale projects in the home improvement sector, thus aligning with the contractors' increased confidence in future business.