KBMI Survey Reveals Impressive Industry Resilience

Robert Isler

The latest NKBA/John Burns Kitchen & Bath Market Index (KBMI) report, which closed in 2021 and provided members a glimpse into 2022, is highly encouraging. After shattering records in Q2 of 2021, it appeared that robust business conditions enjoyed by the kitchen & bath industry had peaked, as traditional study indicators showed a pullback in Q3. However, Q4 results tell a different story. Over 850 members across industry segments responded – a record – and based on their feedback, business continues to boom. 

Specifically, the overall rating was 82.1 (50+ is considered industry expansion), easily topping the 78.7 from Q3 and just a shade below the record 82.3 from Q2. The current business activity showed similar results, as 85.4 was well ahead of last quarter’s 80.9 and nearly matched the record 85.7 from Q2. Most encouraging was the indicator which measures future activity. At 76.6, it was six points ahead of Q3’s 70.6 and topped the Q2 number as well. One would need to return to Q1 of 2021 to find a more positive future assessment.

The drivers are numerous. Among them was continued growth in project backlogs throughout 2021 due to significant supply chain issues or customer postponements. For instance, 54% of designers reported they had project delays, and in some cases cancellations, in Q4 of 2021. But the story is strong even when these delays aren’t taken into account. When asked about new project expectations for the first half of 2022, 56% of designers said they expect demand to increase vs. a minimal 7%, believing it will falter, with the remainder not expecting change.

Along with a prediction of growth in the number of kitchen and bath projects in the first half of 2022 are indications that the scope of those projects will increase as well. The data shows that 60% of designers said their project sizes grew in Q4 of 2022, with just 4% noting a decrease. Based on what retailers taking the survey shared, that trend is not letting up, at least for the near term. 

“If consumers have to wait, they want the best they can afford,” explained one respondant. 

The theme of spending more time at home and wanting to design for the long haul was a constant refrain. One retailer summed it up by noting, “Plans for staying in the same home long-term drives the desire for high-quality products that will last.”

While the picture appears rosy, many factors on the horizon can severely temper the current enthusiasm. Along with our industry’s challenges from the past year, a new set is cropping up. Retailers report that more and more potential customers are shopping online to get products more quickly and at lower price points. Then there are the macro factors, such as the steep rise of inflation, mortgage rates that have begun to move up, an unsettled stock market, and geopolitical developments that are all cause for concern and can lead to homeowner reconsideration about whether they are in the mood for a major remodeling commitment.

Robert Isler is a Market Research Analyst at National Kitchen & Bath Association. He develops macroeconomic and industry survey analyses for nearly 14,000 member companies comprised of manufacturers, designers, showroom owners, and specialists across North America. He also disseminates reports on current and anticipated trends within the $158 billion kitchen and bath industry.

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