Nearly Half of Industry Professionals Saying Demand Has Returned to Pre-Pandemic Levels Today, the National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting (JBREC) released their Q4 2020 Kitchen & Bath Market Index (KBMI), which shows industry sales grew 2% from Q3 2020 and 4% year-over-year from Q4 2019. Retail sales are experiencing especially impressive Read more
kitchen
Nearly Half of Industry Professionals Saying Demand Has Returned to Pre-Pandemic Levels
Today, the National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting (JBREC) released their Q4 2020 Kitchen & Bath Market Index (KBMI), which shows industry sales grew 2% from Q3 2020 and 4% year-over-year from Q4 2019. Retail sales are experiencing especially impressive growth, with average sales up 7.9% from last year, followed by manufacturing (5.5%), building/construction (3.8%) and design (2.4%).
The KBMI reached a rating of 65, representing a third consecutive quarter-over-quarter increase. The index stood at 61.9 in Q3 2020 and was below 50 in both the first and second quarters of last year. Scores above 50 indicate expansion and scores below, contraction. All indicators of this report have improved over the last several quarters — with kitchen and bath market respondents ranking current conditions at 59.8; future conditions at 72.7; and the health of the industry (measured on a scale of one to 10) at 7.1, just below the pre-pandemic 7.2 registered in Q4 2019.
Supply-chain disruption, cost of materials, concerns around keeping COVID-19 under control and availability of skilled labor are the top concerns of industry professionals. More than half (56%) say COVID-19 has worsened the pre-existing labor shortage by fueling demand, with 58% reporting their pipelines are larger now than at the same time in 2019.
The industry expects 10.7% sales growth in 2021
The NKBA has identified the following consumer trends via the latest KBMI report:
- The shift to smaller project sizes seen earlier in the year reverses, as homeowners are undertaking larger projects, including expanding and rearranging floorplans or creating dedicated offices, to increase home functionality. This recalibration of priorities is contributing to anticipated business growth across sectors, as more complex jobs require a level of professional help not seen in 2020’s DIY boom.
- In fact, pandemic circumstances are actually driving demand to 60% of kitchen and bath companies, with members reporting that consumers are beginning the remodeling projects they planned while sheltering in place in 2020.
- Still, there remains higher demand for lower-priced products and finishes. Homeowners also seek out wellness design, perhaps unsurprisingly given the focus on physical and mental health spurred by the pandemic.
“We’re seeing an incomparable surge in homeowners looking to rearrange floor plans, tear out complete kitchens, baths and other rooms to make space for increased activity within the home, and generally create a space that better suits their evolving needs,” said NKBA CEO Bill Darcy. “Our industry’s greatest challenge will be operational, as our members aim to meet growing demand from homeowners with an unmatched appetite for remodeling.”
Each sector of the kitchen and bath market is impacted by current demand in different ways, though all report supply-chain disruptions as a significant, negative impact of COVID-19 on their business. Other key takeaways include:
- Retail sales see strong growth across all price points, though wood items like cabinets are under inflationary pressure due to the lumber market. Regardless, retailers have the most positive outlook on the industry, ranking the KBMI highest of any group at 71.7.
- Demand continues to exceed supply for manufacturers, most notably in cabinetry and appliances, but fewer than one in five (19%) say supply-chain disruptions are significantly impacting their business.
- Building and construction firms report cancellations and postponements are declining, with more than half (58%) reporting zero in Q4, compared to 49% in Q3. Builders are more likely to report supply-chain disruptions as significantly impacting their business (23%) compared to other sectors.
- Half of designers say demand for future projects is higher than it was pre-COVID, while consumers’ finances have less of a negative impact as economic confidence has continued to improve over the last several quarters.
Overall Kitchen and Bath Spending Projected to Total $158.6 Billion in 2021 The National Kitchen & Bath Association (NKBA) today released its 2021 Market Outlook report, revealing the industry is poised for continued growth with overall spending for both kitchen and bath projects to increase in the coming year. The industry anticipates a pronounced rebound Read more
Overall Kitchen and Bath Spending Projected to Total $158.6 Billion in 2021
The National Kitchen & Bath Association (NKBA) today released its 2021 Market Outlook report, revealing the industry is poised for continued growth with overall spending for both kitchen and bath projects to increase in the coming year. The industry anticipates a pronounced rebound in overall industry growth-from -5.9% in 2020 to 16.6% in 2021, compared to 9% in 2018 and 1% in 2019.
Homeowners cite the kitchen and bath areas as two times more important than other spaces within the home, and the kitchen particularly gained status throughout the COVID-19 pandemic, with 70% of homeowners considering it extremely important compared to 64% prior to the crisis. With a renewed focus on these rooms, the industry projects a tailwind of big interior projects, including indoor kitchen remodels. This year may see a shift from the DIY boom of 2020 toward jobs that require a kitchen and bath professional, many of which may have been postponed by homeowners during the pandemic, due to health-risks associated with having someone inside the home.
“After such a strong year for home remodeling in 2020, some wondered if we were approaching a home improvement spending ‘cliff.’ We’re pleased to say that’s not what the kitchen and bath market is expecting in 2021,” said Bill Darcy, NKBA CEO. “Last year, homeowners started the work of improving their living spaces with DIY projects. And this year, with early distribution of the vaccine and other measures to reduce the public health impact of the virus, we expect to see continued renovations and more projects requiring our members.”
The study saw a number of project motivators and inspirations that continue to drive renovations:
- While larger, more professional-intensive projects are slated to increase this year, homeowners cited a desire to save money (25%), additional time to pursue projects (23%) and health and safety concerns (22%) as the primary reasons for recent DIY work.
- Households indicate that improving the home’s aesthetics are the main motivators for remodels in the bathroom (16%) and kitchen (15%), followed by maximizing quality and durability, and increasing the value of the home.
- Homeowners completing budget-friendly bathroom remodels focused on updating cabinets (52% of projects) and plumbing (43% of projects). Smart home products (57%) and water filtration systems (54%) were the focus of premium feature upgrades in the kitchen.
- Both household income and life stage jointly influence kitchen remodel cost considerations. “Mature households,” those age 45+ with no children, have the highest share of premium upgrades in their kitchens.
- Google searches and social media are the primary inspiration for kitchen and bath remodels. Households frequently indicate that they rely on more than one source to inspire a remodel. Young single homeowners or couples tend to more heavily rely on Google and Instagram, while mature adults (45+) put greater weight on other homes seen in person for inspiration.
Economic indicators that may impact remodeling activity include:
- A 10% growth in single family residential construction starts in 2020 will lead to new construction dollarizing in 2021, driving a +17% growth in new residential building materials.
- Spending on new construction represents 57% of the total residential kitchen and bath spending at $90.0 billion. Residential remodeling makes up 43% at $68.6 billion in spending.
- Approximately 1% lower mortgage rates than a year ago will continue to drive demand for homes across buyer segments.
- With a record low for-sale inventory, housing stock is set for price appreciation, which will serve to increase homeowners’ decisions to pursue large-scale remodels. The study forecasts an approximate 31% total house price appreciation between 2020-2023 driven by both the supply shortages and underlying demand.
Methodology
NKBA commissioned the highly regarded consulting firm John Burns Real Estate Consulting (JBREC) to field the study. The data presented in this report is compiled from a variety of sources: The U.S. Census American Housing Survey home-improvement projects microdata, National Apartment Association (NAA) spending (rental), and JBREC’s home improvement estimates and forecasts of single-family rental renovation spending. In addition, a survey was conducted among 4,732 among homeowners who had initiated a home improvement project since the start of the COVID-19 pandemic.
About the National Kitchen & Bath Association and the Kitchen & Bath Industry Show
The National Kitchen & Bath Association (NKBA) is the not-for-profit trade association that owns the Kitchen & Bath Industry Show® (KBIS), as part of Design & Construction Week® (DCW). With nearly 50,000 members in all segments of the kitchen and bath industry, the NKBA has educated and led the industry since the association’s founding in 1963. The NKBA envisions a world where everyone enjoys safe, beautiful and functional kitchen and bath spaces. The mission of the NKBA is to inspire, lead and empower the kitchen and bath industry through the creation of marketplaces, networks and certifications. For more information, visit NKBA.org or call 1-800-THE-NKBA (843-6522).
KBIS® and NKBA® are registered trademarks of the National Kitchen & Bath Association.
Showcasing Jones Stephens’ Full Line of Innovative and High-Quality Residential and Commercial Products. Jones Stephens has put the finishing touches on its 2020 Master Catalog, Volume IX, which is now available for download. Well-organized for ease of searching, the Master Catalog displays thousands of SKUs within 14 product categories, offering over 350 pages of products Read more
Showcasing Jones Stephens’ Full Line of Innovative and High-Quality Residential and Commercial Products.
Jones Stephens has put the finishing touches on its 2020 Master Catalog, Volume IX, which is now available for download. Well-organized for ease of searching, the Master Catalog displays thousands of SKUs within 14 product categories, offering over 350 pages of products for the residential and commercial markets.
Showcasing the broad range of items, the catalog includes, among many other categories, kitchen and bath repair products, plumbing specialties, fittings and valves, plastic and cast iron drains, and toilet seats. New PlumBite® push on fittings, insulation and gas connectors are also included! After examining the catalog and its vast array of products, customers will readily agree with the Jones Stephens’ slogan — “We Got It”!
Jones Stephens continues its leadership in the industry by offering customer friendly FFA’s and an unparalleled service proposition with LTL and small parcel orders shipping same day if orders are placed before 10:30 a.m. and 2:00 p.m., respectively. Jones Stephens continues to focus on making every transaction easy for its customers.
Printed catalogs are available for distribution through Jones Stephens’ rep network. For electronic download, please visit www.jonesstephens.com.
BLANCO, the German manufacturer of finely crafted sinks and faucets, introduces the SOLENTA® and SOLENTA® Senso professional faucets. Inspired by professional kitchens, the impeccably crafted SOLENTA Senso features convenient, sensor technology for the ultimate hands free faucet experience. Sensor technology redefined, the BLANCO SOLENTA takes luxury to a higher level featuring sleek design details, a Read more
BLANCO, the German manufacturer of finely crafted sinks and faucets, introduces the SOLENTA® and SOLENTA® Senso professional faucets. Inspired by professional kitchens, the impeccably crafted SOLENTA Senso features convenient, sensor technology for the ultimate hands free faucet experience.
Sensor technology redefined, the BLANCO SOLENTA takes luxury to a higher level featuring sleek design details, a powerful dual spray and an easy to clean closed coil. Available in sensor or non-sensor models, the SOLENTA faucet is crafted of high-quality, long lasting materials.
“The new SOLENTA SENSO faucet takes sensor technology a step further with the ability to control the flow of water without touching the faucet – simply by waving it on or off,” states Tim Maicher, Director of Marketing for BLANCO. “In addition to being innovative and forward thinking, the SOLENTA embodies beautiful design, drawing inspiration from the chef-inspired look of professional faucets. With BLANCO SOLENTA designers have it all – a trending look with innovative hands free convenience, performance and easy care features.”
The BLANCO SOLENTA and SOLENTA Senso Semi-Professional faucets feature a quick release magnetic hand spray and a flexible steel closed coil spout for easy usage and cleanability. Offered in Stainless Finish and Polished Chrome.
For more information, visit www.blancoamerica.com.
Keeney Manufacturing is excited to introduce Bélanger by Keeney faucets to the U.S. retail market. Bélanger faucets offer affordable luxury for the kitchen, bathroom, and laundry room. Features include grade A brass construction with chrome or PVD resistant, and long lasting, high quality ceramic disc cartridges. The Bélanger line of faucets includes a wide range Read more
Keeney Manufacturing is excited to introduce Bélanger by Keeney faucets to the U.S. retail market. Bélanger faucets offer affordable luxury for the kitchen, bathroom, and laundry room. Features include grade A brass construction with chrome or PVD resistant, and long lasting, high quality ceramic disc cartridges.
The Bélanger line of faucets includes a wide range of features such as rainfall and waterfall shower heads, motion activated kitchen faucets, and water saving bathroom faucets. For more inspiration, see our inventory of household products.