The National Kitchen & Bath Association recently released its annual Market Outlook report. Its goal is to provide a thorough assessment of how various economic and housing market trends impact the kitchen and bath industry. The report provides a gauge of the current market size and a forecast for the entire year. NKBA commissioned the John Burns Real Estate Consulting firm (JBREC) to conduct the study. This analysis is based on various government and industry sources and JBREC’s own internal forecasting models.
The challenges the kitchen and bath industry is expected to face this year don’t include any major surprises, and the only question is which of them will wind down and which will remain with us.
The 2022 Kitchen & Bath Market Outlook study reports that two million individuals have left the labor force since 2020. As a result, recruiting is much more challenging in a rising demand economy. And near-term demographic expectations won’t bring relief since negative growth is expected from 2022-2025 for those aged 20-64, the prime employment age pool.
On the plus side, student loan guarantee agency ECMC Group reports that the proportion of high school students considering a four-year education has plummeted to 48% from 71% since the start of the pandemic. Also, a Conference Board study last year noted that 30% of 18-24 year-olds say trade school is a better option than college.
Based on a more complex supply chain, there is an 84% probability of product delays in K&B vs. 68% for the overall economy.
Another universal challenge is supply chain disruptions. Industries reliant on imports, like kitchen and bath, are more prone to these shipping delays. Because the kitchen and bath industry also has a more complex supply chain than most, this compounds product delays as more players need to coordinate.
The Market Outlook study quantifies the probability of delays by industry. The overall americain economy currently has a 68% chance of disruptions, while kitchen and bath registers at 84%. This can be further divided by product class, with lighting at 90% and topping the K&B categories, followed by cabinetry at 87%. Appliances such as refrigerators are less prone to this issue, with a 76% probability of shipping delays. Despite these predictions, supply chain disruptions are expected to improve as 2022 progresses.
However, building products such as cabinetry will struggle with product delays more than appliances and plumbing fixtures. A major impediment for cabinetry is its heavy reliance on labor. Labor represents just over half the manufacturing process for the overall economy, but it is 95% for cabinetry. In comparison, it is under 40% for stoves and ovens. And while 45% of final products within the overall economy are dependent on other industries, cabinetry’s dependence rises to nearly 60%. This explains why supply chain delays for cabinets are likely to be with us considerably longer compared with other kitchen and bath products.
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.