HACKETTSTOWN, NJ — The kitchen and bath industry is witnessing “an incomparable surge” in demand in residential remodeling activity resulting from homeowners seeing to upgrade and modify their living spaces as an offshoot of the COVID-19 pandemic.
That’s the key finding of the latest in a quarterly series of Kitchen & Bath Market Indexes compiled by the National Kitchen & Bath Association in conjunction with John Burns Real Estate Consulting, an independent research provider and consulting firm focused on the housing industry.
According to the Q4 2020 Kitchen & Bath Market Index (KBMI), whose findings were released last month, industry sales grew 2% from the previous quarter and 4% year-over-year from the fourth quarter of 2019. Retail sales experienced “especially impressive growth,” with average sales up 7.9% from last year, followed by manufacturing (5.5%), building/construction (3.8%) and design (2.4%), the KBMI found.
“We’re seeing an incomparable surge in homeowners looking to rearrange floor plans, tear out complete kitchens, baths and other rooms to make space for increased activity within the home, and generally create a space that better suits their evolving needs,” observed Bill Darcy, CEO of the Hackettstown, NJ-based NKBA.
The latest KBMI posted a rating of 65, representing a third consecutive quarter-over-quarter increase, according to the NKBA. The index stood at 61.9 in Q3 2020 and was below 50 in both the first and second quarters of last year. Scores above 50 indicate expansion and scores below, contraction.
In addition, all indicators of the report have improved over the last several quarters, with kitchen and bath market respondents ranking current conditions at 59.8; future conditions at 72.7, and the health of the industry (measured on a scale of one to 10) at 7.1, just below the pre-pandemic 7.2 registered in Q4 2019.
Supply-chain disruption, cost of materials, concerns around keeping COVID-19 under control and availability of skilled labor are the top concerns of industry professionals, according to the NKBA. More than half (56%) of the industry professionals surveyed for the KBMI say COVID-19 has worsened the pre-existing labor shortage by fueling demand, with 58% reporting their pipelines are larger now than at the same time in 2019.
The NKBA also found that the shift to smaller project sizes seen earlier in 2020 has been reversed, as homeowners are undertaking larger projects, including expanding and rearranging floor plans or creating dedicated offices, to increase home functionality.
“This recalibration of priorities is contributing to anticipated business growth across sectors, as more complex jobs require a level of professional help not seen in 2020’s DIY boom,” the NKBA noted. “In fact, pandemic circumstances are actually driving demand to 60% of kitchen and bath companies, with members reporting that consumers are beginning the remodeling projects they planned while sheltering in place in 2020.”
Each sector of the kitchen and bath market is impacted by current demand in different ways, though all report supply-chain disruptions as a “significant, negative impact” of COVID-19 on their business, the report concluded.