By Bill Darcy, NKBA CEO
We have been reporting on the momentum of the housing markets and remodeling industry since the summer of 2020, and the results of the latest NKBA John Burns Kitchen & Bath Market Index, for the first quarter of this year, bear out this robust performance.
I am elated to report that the Q1 KBMI has recorded its highest score ever: just shy of 80 points out of 100, with all member segments contributing to the vigorous growth. The current rating marks an increase of 14.8 points from last quarter alone, and a 38.8 point improvement from this time last year.
Here are a few key highlights from the report:
- Index Sets New Record: As noted, the overall Q1 KBMI score was 79.8, a significant jump from last quarter’s 65 and a full 10 points above the 69.8 reading from Q4 2019 – which was regarded as one of the most robust quarters in recent history, before the pandemic hit. By nearly all accounts, current K&B demand is the strongest it’s ever been.
- No Let-Up In Sight: Members do not see any slowdown for the foreseeable future. The 82.4 score for future conditions was also a record-breaker, nearly 10 points over the Q4 2020 forecast. The challenge: With such healthy pipelines, nearly half of design firms report their backlogs extend out 3+ months.
- Double-Digit Sales Growth: Each segment reported a 10% sales gain on average over last quarter, led by 11.3% for retail sales. For the full year, members forecast sales to spike 13.4% — a significant upward revision from last quarter’s report.
- Reaching Higher: One in three designers noted that clients are now requesting higher-quality/higher-priced products and finishes. Retailers are experiencing that same customer shift. The trend is likely owing to quick-fix, pandemic-driven DIY projects running their course and being replaced by serious makeovers to accommodate new lifestyles.
- Challenges on the Rise: With all the good news come a few bumps: notably, costs of materials are up considerably, and are tied with supply-chain disruptions as the #1 concern. They scored an 8 on a scale of 1 to 10. Members say they’re feeling squeezed between unprecedented demand and the inability to meet that demand in a timely manner, while skyrocketing prices threaten margins. For the most part, clients accept the increased wait times and costs, but if these challenges continue unabated, it likely will dampen current momentum.
- COVID-19 Impact Begins to Subside: Thankfully, the impact of the pandemic has started to ease, as more Americans become vaccinated and business opens up to near-pre-COVID capacities. Members report a clear increase in floor traffic and a greater willingness for clients to open their homes to designers and workers.
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