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The National Kitchen & Bath Association — a non-profit trade association for the kitchen and bath industry providing tools, research, certification, and events to thousands of professionals — and John Burns Real Estate Consulting (JBREC) released its quarterly Kitchen & Bath Market Index (KBMI) for the second quarter of 2021. With estimates showing an 11% growth in sales for Q2 versus Q1, the report suggests continued growth in the Kitchen and Bath market, despite ongoing material shortages and rising labor costs.
"We're encouraged by the findings from our report on the kitchen and bath industry, which reaffirms the longer outlook of the field as one of growth and strong earnings," said Bill Darcy, NKBA CEO. "While we are seeing the continued delay of materials and increase in labor costs causing problems and concerns within the sector, it also shows that the sky-rocketing demand for remodeling projects has continued. In fact, the industry is experiencing an increased interest in higher-end products as consumers are spending more time than ever in their homes due to the ongoing pandemic and are prioritizing comfort and luxury, particularly when it comes to kitchen and bath improvements."
The COVID-19 pandemic has continued to have significant impact on the supply-chain and material development industries, causing widespread challenges to all sectors of the economy. The kitchen and bath industry is no different as the field has seen "double-digit" price increases across common kitchen and bath products, while labor rates have increased an additional 10 to19% in an effort to retain talent within the industry. All of these factors have put strain on the consumer budget.
Despite these hurdles, there is a clear demand for remodeling services as 60% of designers have reported a backlog of at least three-months. Additionally, in Q2 2021, 55% of the building and construction industry reported zero projects cancelled, a stark contrast from the previous quarter. Furthermore, despite an increase in material costs, nearly half of retailers (46%) have begun to see a shift in typical price points demanded by customers with 89% saying their customers are shifting toward the pricier, higher end finishes.
Among the report's key findings include the following:
While there is optimism about the future of the industry, there are still a few challenges the industry continues to face including the potential threat of the Delta variant of the coronavirus. However, the outlook toward the industry's future is positive as consumers are content to wait out and postpone projects rather than cancelling all together, signaling continued growth for the sector as the year progresses.