Manufacturers, Builders Forge Ahead
NKBA’s third-quarter KBMI reveals that the vast majority of manufacturing employees have returned to work, as capacity utilization rises.
By Robert Isler
The recent Q3 NKBA/John Burns Kitchen & Bath Market Index (KBMI) provides more evidence that the kitchen and bath industry is continuing to move in the right direction. This is particularly true for the manufacturing sector. When asked the percentage of pre-pandemic employees who are now back at work, 61% of manufacturers replied that they are at 90% or more in capacity.
There’s also a budding opportunity. As one member put it, “People retired because of the pandemic, and now we need more qualified labor to ramp back up.” But it gets even better. Based on heavy demand, an additional 14% said they actually have more employees currently than they did pre-COVID.
When asked the percentage of pre-pandemic employees who are now back at work, 61% of manufacturers replied that they are at 90% or more in capacity.
Manufacturing capacity utilization is rising as well. In the Q2 report, 44% of respondents said they were operating at 80% capacity or better. That number now stands at 61%. Nearly 70% of manufacturers said they were reporting capacity shortages. Among the reasons are operational caution, usually the result of periodic outbreaks of COVID-19 within their facilities, and an inadequate supply of labor — hardly a surprise to the industry. Member comments included, “Employee presence is inconsistent, which is affecting our flow and causing capacity shortages,” and “We have seen a boon in certain product lines, and this has created a bottleneck in capacity.” Another “good” problem: “We have to limit the amount of new customers we can take on. The demand is greater than the capacity we have available.”
When asked which factors were significantly impacting their business, not surprisingly, supply chain disruptions topped the list, at 17%, followed by workforce disruptions, at 13%. Third on the list was a positive surprise, as 11% said “More e-business/online sales.” The final concern receiving a double-digit response was showroom closures/slower demand from dealers.
Turning to responses from members who are in building/construction, more than half said that at least 80% of their projects are currently running on schedule. Half noted that not one client had postponed or cancelled a project in Q3, while an additional 34% said that while some projects had been postponed, none had been cancelled. One in five, or 20%, of respondents said that supply chain disruptions were the most significant factor getting in the way of business, with cost increases from suppliers, at 19%, just behind. Two other issues received double-digit responses, including safety concerns, at 15%, and workforce disruptions, at 12%.
Almost all the open-ended replies touched upon challenges related to noticeably higher costs. For instance, one member said, “Building materials have skyrocketed. This has caused major issues and consumers are upset.” Another was more specific, noting, “Higher costs for basic building materials impacts the size of the project consumers can afford. Cabinets, appliances, and construction materials in general are all up.”