Growth Continues in Kitchen/Bath Market
HACKETTSTOWN, N.J. – An industry survey of kitchen and bath professionals found that, despite supply-chain problems and inflation-rate hikes, this year’s first quarter showed double-digit business growth.
The survey from the National Kitchen & Bath Association (NKBA), also detected continued optimism, with respondents noting one of the highest ratings of future conditions in the past three years.
The Kitchen and Bath Market Index (KBMI), released late last month, found that the industry enjoyed a successful opening quarter of the year, growing 12.6% from the fourth quarter of 2021.
“Despite a number of ongoing economic hardships, from material shortages to higher labor costs, we’re excited to see our industry continue to grow and be optimistic about the future,” said Bill Darcy, NKBA’s CEO. “As the world shifts toward a new normal, we’ve seen the kitchen and bath industry continue to adapt ‘s to the times by evolving e-commerce practices, stocking up on available products, and turning toward historically underutilized brands to fulfill customer needs.”
In the KBMI Q1 report, all kitchen and bath industry segments also reported high single-digit sales growth year-over-year, except for manufacturers reporting double-digit sales growth of 10.3%.
2022 full-year sales growth expectations have also increased after a successful first quarter, with professionals anticipating 15.1% growth for the year, up from the 9.4% reported just three months ago.
In the latest KBMI report, the kitchen and bath industry rated future business conditions a 78.6 on a 100-point scale. While the NKBA noted this as “cautious optimism about the future of the industry,” it’s also the second-highest rating in more than three years. (It’s only topped by the 82.4 rating at the end of Q1 last year.)
“From manufacturers and designers to contractors and retailers, the entire kitchen and bath industry has had to adjust to the ever-evolving times that we live in,” Darcy added. “Despite the ongoing headwinds and potential unknown challenges ahead, all signs currently suggest that 2022 will be another strong year for the industry.”
Among the report’s key findings were:
(which is a slight improvement from Q4 2021’s 50% cancellation/postponement rate).
• Cabinets and appliances remained as the scarcest items in the supply chain, forcing product substitution. Refrigerators were the hardest to substitute, with 62% of respondents citing problems; cabinets ranked second at 61%. While countertop materials ranked fifth on the tough-to-substitute list for retailers and designers, surfaces didn’t appear anywhere near the top five of industry members overall.
• Quartz surfaces scored high in the kitchen. The manufactured surface showed a 62% increase in attractiveness among industry members, with only a 5% decrease. Marble’s popularity changed in the quarter with a 14% increase/44% decrease, while granite followed closely at a 14% increase/50% decrease.
• 43% of building and construction firms reported most projects were behind schedule in Q1 2022. Due to long timelines, 46% of building and construction firms had clients cancel and/or postpone projects in Q1
• Industry professionals reported labor availability having a significant impact, rating the overall effect at a 6.7 on a 10-point scale. Industry professionals continue struggling to find qualified labor, raising rates by 18% on average to retain and/or attract talent. Three-quarters of the designer segment increased labor rates 21% on average to retain existing employees, saying competition for qualified labor is fierce.
