Industry Strength Remained High in Q1 2022
The NKBA /John Burns Kitchen & Bath Market Index (KBMI) is a quarterly gauge of current and future market conditions within the kitchen and bath industry. Results are compared with the previous four quarters to determine industry trends and direction by those who know it best. The report also delves into sales expectations, latest industry shifts, and detailed insights into current challenges and opportunities by segment. Key takeaways from the market report include:
- Industry professionals expect 15.1% sales growth in 2022, a revision upward from their 9.4% expectations three months ago. They expect a 14% growth in prices and a 1% growth in volume.
- Overall industry strength remained high at 77.9, although off a bit from last quarter’s near-record of 82.1.
- Although current activity dropped sharply from the previous quarter, 77.3 vs. 85.4, the future outlook is the highest in a year.
- Sales growth forecasts for all of 2022 are up significantly since last quarter.
- Cost of materials and cost inflation is growing industry concerns. Industry professionals are exploring outside their approved vendor lists for products and materials. Brand loyalty is low.
- Labor costs continue higher, with rates up an average of 18%.
- Luxury demand is strongest, although there is strength throughout the industry.
Just under 900 industry professionals participated from our four primary segments – Design, Building and Construction, Manufacturing, and Retail – the second straight KBMI survey with record participation.
“As the leading trade association and advocate for the kitchen and bath industry, we continuously invest in research to provide guidance on performance, projections, and challenges in the sector for our members and the market. We’re pleased to see that despite a softening in housing, the KBMI indicates positive growth and an optimistic sales outlook in the kitchen and bath sectors,” said Bill Darcy, NKBA CEO. “John Burns Real Estate Consulting is the preeminent research analysis partner in the housing space. We embarked on this joint venture to provide a reliable and frequent metric of industry performance and business health to our members and the market.”
Low inventory of existing homes and permanent work-from-home lifestyles are a tailwind for kitchen and bath industry professionals as they continue to benefit from strong demand. Product substitutions remain difficult for all kitchen and bath categories, spurring an increasing reliance on e-commerce for self-sourced available products/materials. Poised for rising inflation, kitchen and bath industry professionals focus on protecting margins, noting it’s now more apparent that subsets of clients are outpriced from remodels.