October survey yields most encouraging results yet, with current demand for goods & services easily above pre-covid levels.

By Robert Isler

The latest results from the NKBA Pulse, a survey of members across all segments, suggests an industry on the rebound. For instance, the basic question regarding overall impact of COVID-19 on business registered a composite score of 5.3, its best ever (1=no impact, 10=significant). This compared with 5.8 in September and 8.2 at its worst back on April 9th when the survey was being conducted weekly. Individual segments in October yielded similar results, ranging from 5.1 for Retail & Sales to 5.5 for Design. Both segments, as well as Manufacturing and Building & Construction, registered their best levels since the survey began. The trend for this question has been remarkably consistent and encouraging. Since April 9th, the second week since its inception, there have been 14 followup surveys. During that six month period, negative impact has steadily drifted lower, or at worst, remained the same.

 
 

COVID-19 Impact on K&B has Consistently Dropped Since Mid-April

Overall, what impact is COVID-19 having on your business? (1=none, 10=significant)


Besides the basic impact question, several others were asked, including “Is demand for your goods and services increasing or decreasing.” Previously, the comparison was with the prior week. In the latest survey, the question was modified and compared with pre-Covid levels. What it revealed was very encouraging. During the April 16th low point, at least 60% of each segment reported that demand had declined, with not one segment reporting even a 10% increase vs. the prior week. As the months went by, the situation continually improved, with the September survey almost the polar opposite of April 9th. In it, 13% reported a decrease in business demand vs. the week before, while 59% noted an increase.

56% said business demand was significantly/somewhat higher than pre-pandemic, vs. just 25% saying it was significantly/somewhat lower.

Arguably, results for this question in the October survey were even stronger. Although the differential between those who said business demand had increased vs. decreased was not as wide, the October comparison was with the period before COVID-19. It revealed that overall demand was more than twice as high as it had been prior to the pandemic! Specifically, 56% said it was significantly/somewhat higher than pre-pandemic, vs. just 25% saying it was significantly/somewhat lower. The remainder did not note a change.

This pattern held true for all segments but one, Design. Although more designer respondents said demand was higher now than during pre-covid days, the margin was much closer, 45% to 40%. Quite possibly, the reason lies in the fact that designers tend to be involved in larger, full scale projects, while other segments can still do well regardless of project size. In a Covid environment, when homeowners are downscaling projects based either on economic uncertainties or fear of having work crews in their homes, full scale projects can be hit hard. This seemed to be confirmed based on NKBA’s latest K&B Market Outlook update, which revealed that DIY projects had increased by 40% from Q1 to Q2. However, despite the Designer segment noticeably lagging others, it continues to move in the right direction.  

The final question was brand new to the October survey and dealt with bankruptcies during Covid. The wording was “Has your company or any other companies you know in the kitchen and bath industry declared bankruptcy during COVID-19?” No negative surprises here. Overall, 7% answered yes to the question, 66% no, with the remainder either saying they didn’t know or weren’t sure. By segment, only 5% of Designers and Retailers answered yes. The larger Manufacturing arena was a little more concerning, with affirmative responses at 12%. 

NKBA will continue to conduct these surveys as the situation warrants.