The NKBA’s kitchen and bath outlook
The National Kitchen and Bath Association (NKBA) has positive news regarding remodeling and industry health.
During the association’s North American Spring 2024 Outlook, conducted via a live webinar this morning, NKBA representatives said the market is headed in the right direction.
According to the Q4 2023 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report, the stability of the market, combined with key indicators of early growth, suggest there is reason for considerable optimism, especially about the potential for significant growth in Q3 and Q4 this year, the association said.
Tricia Zach, NKBA head of research, said the kitchen and bath industry has witnessed healthy growth since 2019 while remaining a “strong and resilient industry.”
At the close of 2023, the kitchen and bath industry’s market size stood at $179 billion. That figure is actually higher than pre-pandemic levels. In 2020, market size measured $136 million, and had it not been for the pandemic, Zach noted that market size could be 3% more than where it was at the end of the year.
For 2024, the NKBA has forecast a 3% drop in residential kitchen and bath spending with market size falling to about $172.9 billion. This includes new construction sliding by 4% to $106.2 billion of market share as remodeling slips 2% to $66.7 billion.
But the latest NKBA/John Burns Kitchen and Bath Market (KBMI), which gauges industry conditions and is produced by the NKBA and John Burns, remained steady at a reading of 53 on a 100-point basis for the fourth quarter of 2023. The figure is flat compared to the KBMI measurement for the third quarter of last year. A reading of 50 or above indicates business conditions are solid. The index is derived from a survey of more than 470 kitchen and bath professionals.
“We are thrilled that it remained on par,” Zach said.
While the “Current Conditions’ Ratings” moved ahead to 49 in the fourth quarter compared to 47 in the third quarter of 2023, the “Future Conditoins’ Ratings” portion of the index jumped ahead to 62 in the fourth quarter compared to 57 in the third quarter of 2023.
Despite project cancellations along with economic challenges, most pros reported a 6.5% increase, on average, in year-over-year project completions and are expecting their revenues to increase by 7% in 2024.
Expected growth
Looking ahead, design firms expect an average 5.9% increase in sales in 2024 as building and construction firms anticipate 2024 growth of 8.2%. Retail sales are projected to grow by more than 5% as manufacturers expect an increase of more than 7%.
“This marketplace has so much opportunity,” said Sherry Qualls, strategic consultant at NKBA Global Connect.
Qualls added that the market has received a push thanks to, ” Supply chain challenges have resolved themselves along with innovation and the introduction of new products.”
Regarding the price tag behind new kitchens, Zach said a medium-sized remodeling project could cost as much as $99,000 while a larger job involving a designer can range between $55,000 to $200,000.
However, Labor remains a major challenge for remodelers and builders who have turned projects down due to a lack of skilled workers. The Midwest is the most labor-impacted region, Zach said.
Looking even further ahead, many homes will be ripe for remodeling activity, however.
Qualls said the homes entering their prime ages for remodeling will reach 24 million by 2027 with homeowners having a good deal of equity to work with.
