Is U.S. Kitchen and Bath Market Cooling Off?
BETHLEHEM, Pa. – The dynamic U.S. kitchen and bath market may be hitting the top of the curve, according to a recent report from the National Kitchen & Bath Association (NKBA).
The Kitchen & Bath Market Index (KBMI) for 2022’s second quarter still shows growth for kitchen/bath construction – but not as much as earlier estimates from the industry group.
The study’s findings indicate that:
- Full year 2022 kitchen and bath sales are expected to increase by 9.4%, down from the 15.1% reported three months ago.
- Kitchen and bath sales grew 6.9% from Q2 2021, marking the second consecutive quarterly deceleration in year-over-year sales growth.
- 59% of design firms and 82% of building and construction firms report either cancellations or postponements of projects.
- Although Q2 construction project completions rose 6.2% year-over-year, supply chain issues and inflation will remain a challenge for the rest of 2022.
- Softening demand for remodeling projects has contributed to a second successive quarter of easing in capacity constraints, with 36 percent of manufacturers reporting that inventories have increased.
Overall, the KBMI market index – a measurement of industry confidence – came in at 70.4 on a 100-point scale, the lowest since Q4 2020. (An index score above 50 represents industry growth, while under 50 points to a slowdown.)
The report findings also rated future business conditions, again on a 100-point scale, at 61.8. That’s down from 78.6 in Q1, showing heightened concern about the year ahead.
“While it’s encouraging to see some initial signs of easing in supply chain and inventory concerns, it’s clear that macro-economic volatility is having some initial impact on demand,” said Bill Darcy, NKBA CEO. “This is an industry that has consistently adapted to rapidly changing circumstances over the course of the past two and a half years.
“There is understandable concern around inflation and interest rates and the potential impact on the industry, but the industry outlook on future business conditions indicates there is still cautious confidence in the ability to navigate a path forward.”
