Project Pipeline Fills Up for Design Firms
Project size, however, continues to lag as increased DIY remains a factor.
By Robert Isler
According to the Q3 NKBA/John Burns Kitchen & Bath Market Index (KBMI), 57% of design firms reported that their current project pipeline now exceeds levels enjoyed during the robust days prior to the start of the pandemic. This is nearly double the 32% who said so in the KBMI second-quarter report, and seven times the level recorded in the first quarter, when only 8% said their pipelines were larger. Stated differently, in the Q1 survey, 75% said their pipeline had decreased from pre-pandemic levels. Just 16% still held that opinion in Q3. Additionally, 40% of designers reported that not one project had been cancelled or postponed during the entire third quarter.
Although all of that is welcome news, it comes at a cost, since many respondents noted the size of their projects had taken a hit. As one designer explained, “Demand for small-scale updates and decorative work that is largely DIY is way up. Most of these people are super price-conscious.” Another answered similarly, saying, “I’m seeing a huge increase in DIY projects and more emphasis on hiring my company for professional services and drawings only,” explaining further that it’s at least partially due to more people being unemployed or spending more time at home.
Almost 1 in 5 (19%) identified supply-chain disruptions as their #1 issue, followed by 12% apiece for safety concerns, cost increases from suppliers and workforce disruptions.
Regarding specific challenges currently faced by designers, supply-chain disruptions easily topped the list. Almost 1 in 5 (19%) identified it as their #1 issue, followed by 12% apiece for safety concerns, cost increases from suppliers and workforce disruptions. Luxury brands from Europe in particular faced major supply disruptions.
The study revealed that the retail segment is enjoying a comeback as well. Foot traffic has turned positive for the first time in many months, with 2 in 3 respondents now saying it is up year-over-year, at an average of 8%. To appreciate how far retail has come, when this same question was asked in the Q1 KBMI survey, 75% said traffic was down, largely due to freshly issued state quarantines across the nation.
Similar to the mixed-bag faced by those in design, not all the gains in retail have been good, with some noting a decline in the quality of new-found traffic. A growing percentage are first-time homeowners or those only interested in DIY projects. One retailer summed up the challenge encountered by many. “We’re seeing a younger, DIY-focused clientele now. We’re figuring out how to manage them.”
Retailers also echoed other challenges faced by designers. For instance, supply-chain disruptions topped retailers’ list of most significant negative impacts, noted by 21% of respondents. This was followed by workforce disruptions at 14% and cost increases from suppliers at 12%. Open-ended comments focused on price pressures from suppliers, with some noting that escalating labor costs are a large contributing factor.