After running out of DIY shelving and paint jobs, homeowners are looking to spend their cash on larger projects than before the pandemic as the economy recovers and vaccine rollouts continue.
The National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting released the KBMI (Kitchen and Bath Market Index) Q1 Report which detailed strong gains in the kitchen and bath industry. The index hit a rating of 79.8, its highest score since the inception of the index and 38.8 point improvement from last year. One year ago, the KBMI sat at a mere 41.0 (a score of over 50 indicates expansion and under 50 represents a contraction). All four segments–design, manufacturing, retail, and building–experienced growth, and though the design sector had the lowest KBMI score, its increase marked a shifting point in the home improvement market from DIY to larger-scale projects.
“There is continued optimism in the industry with COVID-19 becoming less of an obstacle due to the rapid vaccine rollout,” says NKBA CEO Bill Darcy. “We are encouraged to see the index reach a historic high, and look forward to the continued industry growth as homeowners opt for larger, more upscale remodels.”
Homeowners spring for pricier finishes, products amid supply chain strain
One in three NKBA members report that clients are asking for higher-priced products and finishes, and demand is at an all-time high thanks to remote work necessitating layout changes in the home, according to NKBA’s report.
“As consumers experience more flexibility in their working arrangements, there’s an increased need for total reconfigurations for their spaces,” notes Todd Tomalak, Principal of JBREC. "And from an economic perspective, we've seen Americans utilizing their stimulus checks and savings from canceled vacations or other activations — which have been largely paused for the last year — for these home-improvement projects."
Supply chain issues and backlogs continue to put pressure on remodelers as manufacturers report lead times of over six weeks and suppliers struggle with international shipping delays. Over three-fourths of manufacturers reported severe capacity constraints, higher than last quarter when only 23% of respondents indicated severe constraints. Still, over 55% of NKBA members said that they suffered no cancellations or delays, a major improvement from when the pandemic first hit over one year ago. Cheers to that.