Kitchen & Bath Market Index surges in Q1
The National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting (JBREC) reported that the Q1 2021 Kitchen & Bath Market Index (KBMI) has soared to a rating 79.8.
This is the highest score since the inception of the index. KBMI measures the current strength of the industry, expectations and challenges facing four major sectors — design, manufacturing, retail and building — with scores above 50 indicating expansion and scores below 50, contraction.
The current rating marks an increase of 14.8 points from last quarter alone and a 38.8 point improvement from this time last year.
Significantly, one in three designers noted that clients are now requesting higher-priced products and finishes. Retailers are experiencing that same customer shift.
The trend is likely owing to quick-fix, pandemic-driven DIY projects running their course and being replaced by serious makeovers to accommodate new lifestyles, the NKBA said.
“There is continued optimism in the industry with COVID-19 becoming less of an obstacle due to the rapid vaccine rollout,” said NKBA CEO Bill Darcy. “We are encouraged to see the index reach a historic high, and look forward to the continued industry growth as homeowners opt for larger, more upscale remodels.”
“As consumers experience more flexibility in their working arrangements, there’s an increased need for total reconfigurations for their spaces,” notes Todd Tomalak, Principal of JBREC. "And from an economic perspective, we've seen Americans utilizing their stimulus checks and savings from canceled vacations or other activations — which have been largely paused for the last year — for these home-improvement projects."
Overall, demand is at an all-time high as vaccination rates increase and for some, permanent and hybrid work-from-home lifestyles are encouraging consumers to reconfigure their home layouts.
As the pandemic’s impact on the market starts to lessen and previously postponed projects resume, backlogs for projects are reaching upwards of three to six months.
Continued supply chain disruptions from COVID-fueled demand and factory shutdowns at the onset of the pandemic are further affected by the Suez Canal incident and overall port congestion, but NKBA members remain confident in the industry outlook with expected sales to be markedly higher in Q2 2021.
As members see less of a negative impact from COVID-19 on their business, they reported a near-double-digit sales growth of 9.7% on average in Q1 2021, compared to the same period in 2020.
As for future sales and overall industry health, bullish demand and consumer confidence continue to fuel a positive outlook.
Design companies have the lowest rating of the overall industry, at 76.1, while Building & Construction, Retail Sales and Manufacturing segments soar at 83.8, 82.2, and 86.7, respectively.