Pipelines Pumped but No Letup in COVID
A majority of respondents in the KBMI 4th quarter report say their project pipelines are larger now than they were pre-pandemic, although COVID-19 is still having a significant effect on business.
By Robert Isler
Although the pandemic is now entering its second year, its impact continues to be significant. According to the Q4 2020 NKBA/John Burns Kitchen & Bath Market Index (KBMI), COVID-19’s overall impact on business is 6.4 out of 10 — which is up from 5.9 from Q3. This is likely due to the worsening number of COVID cases experienced during the fourth quarter. The Manufacturing segment was hit hardest, with impact growing from 5.5 to 6.4. On the other hand, the impact on the Retail segment was unchanged, registering 6.3 for both quarters.
Nearly 6 in 10 (59%) say COVID drove demand higher in Q4, the same percentage as in Q3, with members noting that additional time spent at home has been a major factor. Again, there are clear differences by segment, with Design at 54% and Building & Construction at 66%. Similarly, 58% say their pipeline was larger in Q4 than it was in Q3. Respondents noted that labor and supply constraints have impacted their ability to keep their backlog down, as projects remain in the pipeline much longer.
Nearly 6 in 10 (59%) say COVID drove demand higher in Q4, the same percentage as in Q3, with members noting that additional time spent at home has been a major factor.
While 33% still report major changes in the types of products and services demanded by customers owing to COVID concerns, that’s down from 40% in Q3. Two areas were cited as being most affected by the pandemic — price point and project size — with 19% mentioning prices and 16%, project size. Most of the COVID-related demand shift (56%) has resulted in lower prices, but 44% acknowledged that price points were increasing.
The findings were brighter for project size, with 57% noting they were larger and 43% saying they were smaller. Significantly, the shift to larger-sized projects is a reversal from Q2 and Q3, as members are increasingly finding that customers are coming back to full-scale remodels to accommodate changing home-life needs.
Meanwhile, 43% of NKBA members in the survey said demand has returned to pre-pandemic levels, while an additional 15% expect that to occur by the second quarter of 2021.