The National Kitchen & Bath Association and John Burns Real Estate Consulting have released their Kitchen & Bath Market Index for Q1 2020, drawn from a quarterly survey of kitchen and bath building, manufacturing, and design professionals on industry conditions.
It is the first KBMI release to take the domestic effects of COVID-19 into account. Respondents say that the pandemic has had an impact of 8.08 on their businesses on a scale from 1 (no impact) to 10 (significant impact.) Retail sales (8.3) and building/construction (8.29) have been the most affected, followed by design (7.96) and manufacturing (7.84).
Economic uncertainty and fear of a recession are among professionals’ primary challenges. The top three concerns from last quarter’s survey – cost of materials, availability of skilled labor, and labeled cost – have fallen to seventh, eighth, and 11th place for this quarter.
While 69% of kitchen and bath projects have been impacted by the crisis, a majority – 48% – were postponements rather than cancellations. One in four retail companies say closing their showroom has had the biggest impact on their business, while 52% of design firms report they have temporarily closed their physical locations. However, some retailers have benefited from remote sales, and some designers predict shelter-in-place orders may contribute to a rise in home renovations.
On average, respondents reported a 2.8% decline in sales for Q1, likely owing to a strong January and February. Cancellation rates have fallen from a high of 14% in early April to 11.9% as of May 1st. The majority of respondents – 68% expect a return to normalcy for their practice by September, while 25% are unsure of improvement until at least 2021.
“The first quarter of 2020 brought unprecedented change — not just to our industry, but the economy as a whole,” says Bill Darcy, CEO of NKBA. “We know that many kitchen and bath businesses, especially smaller ones, are hurting, and we hope that this report and its findings provide insights on how their fellow industry members are responding. And while the global health and economic crisis has negatively affected our members — there’s no doubt about that — we are pleased to see that work does continue and there are signs of brighter times ahead.”
