Kitchen And Bathroom Market In The US Is Expected To Grow By 9.1% In 2022

Kitchen And Bathroom Market In The US Is Expected To Grow By 9.1% In 2022

The National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting (JBREC) recently released their Kitchen & Bath Market Index (KBMI) for the third quarter of 2021, which shows that despite continued strong market demand, the challenges of the epidemic are having a cooling effect on a very positive full-year outlook. The overall index fell by 4% year on year.

The kitchen and bathroom sector is emerging from a record quarterly growth in the second quarter. This is driving full-year sales forecasts of around 12 percent year-on-year growth. Many members remain encouraged by future growth in 2022. According to the report, the kitchen and bathroom industry will continue to show healthy expansion despite the challenges it faces. The overall score for members was 78.7, slightly lower than the 79.8 and 82.3 scores for the first and second quarters of the year. While the projected reduction in sales growth in 2021 appears to be working against the industry, it has still been an incredibly successful year. The industry is expected to end the year on a growth trend.

Bill Darcy, Chief Executive Officer of the NKBA, said: “The latest third-quarter results are slightly below the very strong forecasts for the second quarter. But it’s a positive sign that the kitchen and bathroom industry is set for a strong year.” “Continuing challenges such as supply chain disruptions, material costs and the availability of skilled labor are hampering the industry’s ability to take full advantage of strong demand.”

The kitchen and bathroom industry was able to thrive early in the epidemic. Historic growth was achieved as homeowners enjoyed higher levels of home equity and were eager to renovate as they continued to spend more time in their own homes. However, the ongoing challenges of the epidemic have reduced the rating of the health of the sector by almost 4%. They faced rising material costs in the early days of the epidemic and are now increasingly inclined to wait until 2022, in the hope that prices will stabilize. As a result, respondents were more cautious in their measures of current and future business conditions – down by 6% and 3% respectively. Member companies expect more consumers to defer demand until 2022.

Global supply chains are one of the main areas of concern for members. According to the report, shortages in global supply chains are forcing companies in the kitchen and bath industry to shift to sourcing more US-made products. They are utilizing more brands that were not previously included to circumvent the global supply chain issues. Manufacturers are prioritizing high-value products to protect margins while stocking excess materials to help reduce lead times and overall constraints. The kitchen and bathroom industry is also demonstrating its resilience by developing creative solutions to mitigate the impact of retailers who pack up their overstocked storage facilities and buy in bulk where possible. Construction companies add extra upfront time for kitchen and bathroom products to reduce delays. Manufacturers stock up on raw materials and focus on reducing production lines to streamline production.

The report notes that the US kitchen and bathroom industry will continue to suffer from supply chain challenges. Port congestion has further exacerbated the strained supply chains. These supply chains are still recovering from the effects of Winter Storm Uri and Hurricane Ida, while labor shortages have caused delays in the trucking industry. Meanwhile, domestic and international raw material deliveries are taking well over six weeks. As a result, product backlogs will continue into 2022, as these difficulties prevent the industry from scheduling complete production schedules.

In the face of the current difficulties, the report remains cautiously optimistic about the health of the kitchen and bathroom industry, with NKBA member companies giving it a score of 7.9 out of 10 in the KBMI’s third-quarter report. Despite the deferral of kitchen and bathroom renewal projects until 2022, the industry continues to see demand for building and construction projects. This is because 84% of companies reported low deferral rates and 90% reported low cancellation rates in relation to their overall project volumes. When consumers start their projects, they tend to use premium products. 73% of retailers report a shift in price points towards premium products.

Overall, NKBA member companies still expect positive sales growth for the full year 2021 and anticipate 9.1 percent sales growth for the full year 2022, as some deferred items are expected to resume. “The good news is that despite the ongoing challenges, the report found that consumers are choosing to defer rather than cancel items,” Darcy said.

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