An overwhelming 86% of designers responding to the latest NKBA /John Burns Kitchen & Bath Market Index (KBMI) survey, which closed out 2021, indicated product sourcing difficulties, with cabinets and refrigerators leading the way. While this isn’t anything new, it’s causing designers to become more creative or risk project postponements or even cancellations by frustrated clients. Over half the designers surveyed in Q4 reported project disruptions. The good news is that those numbers aren’t any worse than they were in the previous two quarters. The bad news is that the problem isn’t likely to disappear anytime soon. It’s wreaking havoc on project timelines, with 58% saying they have three or more months backlogs, a slight uptick compared with Q3.
The vast majority of those using new brands, 64%, are doing so because of better lead times and availability. Only 15% are switching for more favorable pricing and 13% because clients requested it. A third of respondents discovered new brands independently, while another third moved forward based on supplier recommendations. The remainder is following the lead of other industry professionals or, in some cases, following client suggestions. In all, 46% of designers are now sourcing brands that they hadn’t used pre-COVID. 51% plan to return to their historical brands in the future, while 45% aren’t sure.
Many respondents shared how they are attempting to minimize sourcing issues. One stated, “We are trying to substitute materials ahead of scheduled projects. My whole team is constantly sourcing products/materials.”
Others are banding together with industry professionals outside their firms.
“A lot of designers have rallied together and are sharing recommendations,” explained one respondent.
“My vendors are starting to notify me of product availability,” said another. “They want to make a sale as much as I do.”
The issue is not just one of the sourcing delays but runaway costs.
“Costs and timelines for project completions are way beyond what any of the professionals on the project estimated,” said one respondent. “Clients aren’t prepared for this.”
Still, another stated that demand had been steady but wondered how much longer that would last as prices rose. Despite these challenges, the fact remains that business is solid. 60% of designers said the average project size and scope has increased since pre-COVID, with half noticing a shift towards higher-priced/higher quality products and materials as the gap between higher-tier and lower-tier offerings narrow due to price hikes. What’s telling is that, when asked during Q4, 56% of designers said they expect an increase in project requests in the first half of 2022, while only 7% believe there will be a decrease, numbers that are very comforting for the near-term state of the industry.
Overall industry strength bounced back to a solid 82.1, near its all-time high. Anticipated future activity also registered a substantial uptick to 76.6 from Q3’s 70.6. Homeowners continue to opt for higher quality materials and products, wishing to design their homes for the long haul. Project costs continue to be an issue, with more homeowners staying on the sidelines, at least for now, until prices stabilize.
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.