Projects Shift Upward in Price Sales growth expectations rise to 13.4% The National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting (JBREC) today reported that their Q1 2021 Kitchen & Bath Market Index (KBMI) has soared to a rating 79.8, its highest score since the inception of the index. KBMI measures the Read more
Industry News
Projects Shift Upward in Price Sales growth expectations rise to 13.4%
The National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting (JBREC) today reported that their Q1 2021 Kitchen & Bath Market Index (KBMI) has soared to a rating 79.8, its highest score since the inception of the index.
KBMI measures the current strength of the industry, expectations and challenges facing four major sectors — design, manufacturing, retail and building — with scores above 50 indicating expansion and scores below 50, contraction. The current rating marks an increase of 14.8 points from last quarter alone and a 38.8 point improvement from this time last year.
Significantly, one in three designers noted that clients are now requesting higher-priced products and finishes. Retailers are experiencing that same customer shift. The trend is likely owing to quick-fix, pandemic-driven DIY projects running their course and being replaced by serious makeovers to accommodate new lifestyles.
“There is continued optimism in the industry with COVID-19 becoming less of an obstacle due to the rapid vaccine rollout,” said NKBA CEO Bill Darcy. “We are encouraged to see the index reach a historic high, and look forward to the continued industry growth as homeowners opt for larger, more upscale remodels.”
“As consumers experience more flexibility in their working arrangements, there’s an increased need for total reconfigurations for their spaces,” notes Todd Tomalak, Principal of JBREC. “And from an economic perspective, we’ve seen Americans utilizing their stimulus checks and savings from canceled vacations or other activations — which have been largely paused for the last year — for these home-improvement projects.”
Overall, demand is at an all-time high as vaccination rates increase and for some, permanent and hybrid work-from-home lifestyles are encouraging consumers to reconfigure their home layouts. As the pandemic’s impact on the market starts to lessen and previously postponed projects resume, backlogs for projects are reaching upwards of three to six months. Continued supply chain disruptions from COVID-fueled demand and factory shutdowns at the onset of the pandemic are further affected by the Suez Canal incident and overall port congestion, but NKBA members remain confident in the industry outlook with expected sales to be markedly higher in Q2 2021.
As members see less of a negative impact from COVID-19 on their business, they reported a near-double-digit sales growth of 9.7% on average in Q1 2021, compared to the same period in 2020.
As for future sales and overall industry health, bullish demand and consumer confidence continue to fuel a positive outlook. Design companies have the lowest rating of the overall industry, at 76.1, while Building & Construction, Retail Sales and Manufacturing segments soar at 83.8, 82.2, and 86.7, respectively.
And overall, the industry increased full-year sales growth expectations to 13.4% in 2021, up from their rating of 10.7% in Q4 2020.
The following trends are expected to impact homeowners and the industry through 2021:
- Members are seeing larger project scopes as homeowners invest in whole-home reconfigurations and luxury finishes.
- Designers also cite permanent work-from-home lifestyles as a catalyst for the consumer shift to high-end, higher-priced materials and finishes with designer firms reporting a 61% increase in the average size of projects.
- The main obstacle for members is sourcing affordable materials as delays and price hikes make it difficult to maintain profit margins. More US-based sourcing could be likely as import delays and pricing become more severe and firms are sourcing outside their approved vendor list to accommodate.
- Appliances have been the most difficult products to source, with 51% of designers reporting difficulty sourcing refrigerators, ranges/stoves and dishwashers.
- The majority of firms are increasing labor rates to maintain current staffing levels and bolster recruitment efforts, but these increased costs aren’t expected to deter demand, as consumers are eager to remodel their primary bath and kitchen spaces.
Notable challenges and opportunities for the kitchen and bath market include:
- Over half of designers (55%) report no project cancellations or postponements in Q1, but 45% note material shortage and product pricing are starting to affect project timelines.
- As vaccination rates climb, consumers are more comfortable shopping in-person for items with over 50% of retailers reporting growth in foot traffic in Q1 2021 (compared to 35% in Q4 2020).
- 45% of retailers continue to report a shift in price-point with 70% shifting to higher prices, and despite price surges for some products, consumers are still opting to pay for high-end products and finishes. Refrigerators and ranges/stoves are seeing the highest price climb at 12% and 11%, respectively.
- 60% of manufacturing firms report average lead times of 6+ weeks in Q1 2021, a drastic increase from Q4 2020 (36% reporting 6+ week lead times). 78% of manufacturers report severe capacity constraints at this time, a rise from the prior quarter (23%) due to extended lead times on raw materials and significant freight delays.
- With the surge in remodeling demand, 67% of building and construction firms report a backlog of 3+ months and of that, 21% have a backlog extending through 2021.
- With the pandemic affecting many industry professionals, the already strained labor market continued to dwindle. In response, over 60% of companies report increasing labor rates to retain current staff and of the companies reporting labor rate increases, almost half report increasing labor rates 10-19%.
Top water heating manufacturer joins non-profit service organization for shared focus on education and workforce development Bradford White Corporation announces a partnership with Plumbers Without Borders, a grassroots non-profit organization working to increase global access to safe water and sanitation. The partnership affirms Bradford White’s commitment to impactful engagement within the industry and supports Plumbers Without Read more
Top water heating manufacturer joins non-profit service organization for shared focus on education and workforce development
Bradford White Corporation announces a partnership with Plumbers Without Borders, a grassroots non-profit organization working to increase global access to safe water and sanitation.
The partnership affirms Bradford White’s commitment to impactful engagement within the industry and supports Plumbers Without Borders’ ongoing contributions to professional training, promoting careers in the trades and maintaining the industry’s commitment to the highest standards of quality for products and services.
“Plumbers Without Borders is a unique organization that demonstrates the generosity and goodwill of the hard-working men and women in our industry,” said Carl Pinto, Jr., senior director of marketing communications for Bradford White. “Our company has always been dedicated to social leadership and to strengthening the plumbing and water heater industry. Helping uplift the work of Plumbers Without Borders not only supports their noble work around the world, it’s an investment in showcasing the essential nature of the work we do every day.”
Plumbers Without Borders was founded in 2010. The organization connects volunteer plumbers and other skilled tradespeople with projects around the world that are establishing safe plumbing and sanitary systems and promoting related health and safety education. Plumbers Without Borders selects partners based on quality, service, craftsmanship and training.
“It’s an honor to partner with Bradford White Corporation,” said Domenico DiGregorio, president and co-founder of Plumbers Without Borders. “Our mutual respect for quality, craftsmanship, professional training and workforce development creates a great platform for advancing our collective work toward improving lives and health around the world by increasing access to safe water and sanitation.”
Milwaukee, Wiss. — Milwaukee Tool is proud to announce the expansion of their corporate operations into downtown Milwaukee, Wis. The company’s current global headquarters in Brookfield, Wis., will remain the central location for the company’s corporate operations. This new expansion will provide increased space to accommodate the company’s rapid growth. Anticipated to open in October Read more
Milwaukee, Wiss. — Milwaukee Tool is proud to announce the expansion of their corporate operations into downtown Milwaukee, Wis. The company’s current global headquarters in Brookfield, Wis., will remain the central location for the company’s corporate operations. This new expansion will provide increased space to accommodate the company’s rapid growth. Anticipated to open in October, this building will house 1,200 employees within the next three years.
“Over the past 10 years we’ve grown at an incredible rate, not just across the country and the world, but also at our global headquarters in Wisconsin. By extending our corporate presence into downtown Milwaukee, we are poised for continued growth. As one of the largest employers in southeastern Wisconsin, we’re thrilled to expand our presence in the city, as we continue to attract, retain, and recruit from a diverse pool of local talent,” said Steve Richman, Milwaukee Tool Group President.
Milwaukee will invest more than $30 million to purchase and renovate a vacant 333,000-sq.-ft. building in downtown Milwaukee. This building will act as an extension of the company’s global headquarters in Brookfield. Milwaukee Tool’s initial plans include housing at least 1,210 employees at this location within the next three years; however, the company has the option to expand the office space by adding 150,000-square-feet, for up to an additional 790 employees.
While U.S. manufacturing and distribution are an integral part of Milwaukee Tool’s global footprint, the disruptive innovation for the trades all starts at the global headquarters in southeastern Wisconsin. Over the last decade, the company redeveloped 190,000 sq. ft. of space in Brookfield to accommodate research and development, product development, prototyping, packaging design, marketing, sales, training facilities, and administrative offices. In 2017, Milwaukee Tool completed construction and took occupancy of a new 200,000-square-foot, four-story office building on the same campus, and took occupancy of an additional 116,300-sq.-ft. building in January 2020. With a recent announcement of a new campus in Menomonee Falls, a West Bend-based manufacturing plant, and this new expansion into downtown Milwaukee, the company is positioned to stay in the heart of Wisconsin long term.
By the end of 2021, the company will have over 3,100 employees located in Wisconsin.
The Home Depot®, the world’s largest home improvement retailer, today recognized the hundreds of high school seniors and college/postsecondary students entering the skilled trades by participating in SkillsUSA’s National Signing Day 2021 as the Southeast sponsor. As part of the celebration, and the company’s trades training program, Path to Pro, The Home Depot Foundation provided Read more
The Home Depot®, the world’s largest home improvement retailer, today recognized the hundreds of high school seniors and college/postsecondary students entering the skilled trades by participating in SkillsUSA’s National Signing Day 2021 as the Southeast sponsor. As part of the celebration, and the company’s trades training program, Path to Pro, The Home Depot Foundation provided scholarships to six students entering the skilled trades.
“We’re thrilled to help these students achieve their dreams as they enter the building and construction trades,” said Shannon Gerber, Executive Director, The Home Depot Foundation. “The opportunity to partner with SkillsUSA and Klein Tools to provide support to the next generation of tradespeople is incredibly rewarding.”
Uniquely designed for SkillsUSA students pursuing a career in the building and construction trades, the program granted $30,000 in scholarships towards each student’s trade school tuition. The Home Depot Foundation and SkillsUSA selected six winners from the Southeast region, including:
- Annayeli Dionisio, Columbus Career & College Academy, Whiteville, N.C.
- Jalen Randolph, Butler County Career Academy, Greenville, Ala.
- Jesse Moran, RIVEROAK Technical College, Live Oak, Fla.
- Kayla Eades, Cross Keys High School, Atlanta, Ga.
- Michael Snipes, East Laurens High School, East Dublin, Ga.
- Zackery Pitchford, Lumpkin County High School, Dahlonega, Ga.
The Home Depot Foundation continues to build upon the progress of its trades training program, which to date, has exposed more than 15,000 to the skilled trades while also certifying more than 5,000 participants in its first few years. As sponsors of National Signing Day, The Home Depot and Klein Tools have had the opportunity to forge meaningful relationships with students and schools across the country.
“The Home Depot plays a critical role in the building and construction space serving both professional contractors and consumers,” said SkillsUSA Executive Director Chelle Travis. “Their involvement and investment in National Signing Day have been powerful in advancing our mission and supporting our students’ accomplishments.”
Milwaukee — Milwaukee Tool will, once again, expand their footprint in the United States (US) with the announcement of a new manufacturing facility in Grenada, Mississippi. Anticipated to open in late 2022, this new facility will accommodate increased capacity for the company’s growing power tool accessories and power tool business. With this facility, Milwaukee has Read more
Milwaukee — Milwaukee Tool will, once again, expand their footprint in the United States (US) with the announcement of a new manufacturing facility in Grenada, Mississippi. Anticipated to open in late 2022, this new facility will accommodate increased capacity for the company’s growing power tool accessories and power tool business. With this facility, Milwaukee has committed to creating 1,200 jobs in the region.
“Our new Grenada facility, as well as our ongoing investments in U.S. operations and manufacturing, will allow us to continue to serve our distribution partners and users with the speed, agility, and unparalleled levels of innovation that they’ve come to expect from Milwaukee Tool,” said Steve Richman, Milwaukee Tool Group President. “We’re thrilled to continue expanding our presence in Mississippi, where we have been fortunate to attract, retain, and recruit some of the best talent in the country. The bookends to our success continue to be our people and our culture.”
Milwaukee will invest $60 million in advanced technology and manufacturing equipment to support the operation of their new 500,000-square-foot manufacturing facility in Grenada. During the last decade, the company has grown their employee headcount in the state from 526 in 2010, to more than 2,343 in 2020. Of the 1,200 overall jobs Milwaukee will bring into the region, 800 of these jobs will reside in the new Grenada facility, and the remaining 400 will reside across their existing MS locations.