Those who remodel kitchens and baths in homes across the nation enjoyed a solid first quarter and are on track to a strong full year despite buffeting headwinds, according to new data.
The National Kitchen & Bath Association (NKBA) has released its Kitchen & Bath Market Index for the first quarter of 2022, which showed year-over-year growth of 12.6 percent.
“Despite a number of ongoing economic hardships, from material shortages to higher labor costs, we’re excited to see our industry continue to grow and be optimistic about the future,” said Bill Darcy, the organization’s CEO.
“As the world shifts, we’ve seen the kitchen and bath industry continue to adapt to the times by evolving.”
While price points have continued to rise, demand for remodeling projects has stayed strong, the report suggested. All industry segments reported year-over-year growth, led by manufacturers (up 10.3%).
2022 full-year sales-growth expectations also have increased, with professionals anticipating 15.1-percent growth for the year, up from the 9.4 percent reported just three months ago.
In the latest KBMI report, the kitchen and bath industry rated future business conditions a 78.6 on a 0-to-100-point scale, displaying cautious optimism about the future of the industry.
Rising interest rates and low resale inventory have been headwinds for home sales but have proved tailwinds for big remodeling projects, as consumers leverage home equity and other discretionary income to “trade up in place.”
Despite additional inflationary pressures potentially pricing out some homeowners, the industry reported a healthy number of backlogged projects, allowing the sector to feel confident about the road ahead.
“Despite the ongoing headwinds and potential unknown challenges ahead, all signs currently suggest that 2022 will be another strong year for the industry,” Darcy said.
As the ongoing worldwide material shortage continues, kitchen-and-bath-industry professionals have reported serious delays to their projects. Forty-three percent of building and construction firms report most of their projects were behind schedule in the first quarter of 2022.
Firms have tried to get out ahead of projects by pre-ordering as often as they can; however, industry-wide backorders and shipping delays prevent them from maintaining timelines.
A further consequence of these material delays has been client cancellations due to long timelines, as 46 percent of building and construction firms had clients cancel and/or postpone projects in the first quarter. While this is a slight improvement from the preceding quarter’s 50-percent cancellation/postponement rate, the trend continues to be a concern for the industry moving forward.
The first-quarter survey found that luxury products once again are the most popular category for consumers. However, these products also come with the longest wait times.
Industry professionals reported labor availability as having a significant impact on their businesses and their ability to keep up with demand, rating the overall impact a 6.7 on a 10-point scale.
Industry professionals continue struggling to find qualified labor, raising rates by 18 percent on average to retain and/or attract talent.