According to the National Kitchen & Bath Association and John Burns Real Estate Consulting latest Q4 2020 Kitchen & Bath Market Index (KBMI), industry sales grew 2% from Q3 2020 and 4% year-over-year from Q4 2019. Retail sales are experiencing 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 reached a rating of 65, representing a third consecutive quarter-over-quarter increase. 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. All indicators of this 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. More than half (56%) 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 has identified the following consumer trends in 2021:
"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," said NKBA CEO Bill Darcy. "Our industry's greatest challenge will be operational, as our members aim to meet growing demand from homeowners with an unmatched appetite for remodeling."
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.
Other key takeaways include: