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US Bathroom And Kitchen Supply Chain Disrupted
According to US media reports, the disruption to the supply chain continues to have a serious impact on material prices, product backlogs, freight costs and kitchen and bathroom project cycles. While the current situation may be temporary, it is estimated that it will continue into next year.
According to the latest survey by the National Association of Home Builders (NAHB), the situation has deteriorated significantly “dramatically” since the same period last year. The impact has been wider, with shortages of bathroom fittings, household appliances, tiles, cabinets and other key components used in the manufacture of refrigerators, ovens, dishwashers, microwaves, washing machines and dryers. The shortage of bathroom fittings reached 75 percent of the real estate agents surveyed, while the shortage of tiles reached 51 percent. The most serious shortage was for household appliances, at 95%.
Material shortages are now more widespread and deeper than at any time since 1990, and the slight increase in costs has exacerbated this effect, reducing builders’ confidence in the market to its lowest level in a year.
Bathroom suppliers, home decorators, distributors, real estate agents and others are facing a year-long ‘storm’ of surging demand, coupled with material shortages, logistical challenges and pandemics. While remodeling demand is soaring as vaccination rates increase and the DIY home market is fuelled by emerging lifestyles, supply chain disruptions have led to severe shortages of key building products. At the same time, supply constraints are causing material costs to soar.
According to the latest Kitchen and Bath Market Index (hereinafter: KBMI, the US Kitchen and Bath Market Index) compiled by the National Kitchen and Bath Products Association (NKBA), John Burns Real Estate Consulting, supply chain issues coupled with rising material prices and transportation costs are forcing an increasing number of home design companies to face longer lead times, while needing to seek alternative sources of supply and increase prices to protect margins.
According to the KBMI, the U.S. Kitchen and Bath Market Index for the first quarter of 2021, 45% of dealers and designers surveyed said material shortages and product pricing are impacting project lead times. 60% of manufacturing facilities surveyed noted average lead times of six weeks or more, a significant increase from the previous quarter. Capacity is being severely constrained by longer delivery times for raw materials and significant freight delays. Meanwhile, 67% of real estate vendors surveyed noted that work had been backlogged for more than three months, and 21% noted that the backlog would continue until the end of 2021.
Meanwhile, US-based factories are beginning to add capacity and restructure their supply chains. In June this year, it was reported that DEVIDA Bathrooms announced that it would “prioritize” certain brands of products while suspending production of other ranges. The company said that this situation was expected to continue until the fourth quarter of 2021, and noted that while no new orders would be taken during this period, existing orders would not be affected by the decision.
In addition to the US, Germany is also facing a supply chain disruption crisis. The German Bavarian plumbing and bathroom industry is already experiencing shortages of steel and brass, starting with wood and plastic. In just one year, the price of insulation boards has risen by 10%. Steel has risen by 30 percent and roofing sheets by 31 percent. And the global price of copper has risen by 80 percent in the last 12 months.
In addition to delivery problems, a shortage of skilled workers is also affecting the construction industry. Recruiting skilled workers, including in China, has become the biggest difficulty in recruiting workers.
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