If you have wanted a spa bath, now may be the time to install it.
Last week the National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting (JBREC) released their third-quarter 2020 Kitchen & Bath Market Index (KBMI.) For the first time this year, the KBMI is above 50, at 61.9; up from 44.2 in Q2 and 41 in Q1. Scores of 50 indicate expansion and scores below indicate contraction.
NKBA members rank the overall health of the industry at 6.9 (on a scale of one to 10,) just below the 7.2 reported in pre-COVID Q4 2019. While confident about current business conditions at 56.5, industry members are even more optimistic about future conditions, which they set at 66.9 as 2020 draws to a close.
“As we approach the end of an unprecedented year, the industry outlook is promising,” said NKBA CEO Bill Darcy. “While COVID-19 will continue to present challenges to the supply chain, labor and spending, we’re grateful to be one of a few industries that has actually seen growth in response to consumers spending more time at home and looking to make their spaces more functional in this new normal. Kitchen and bath professionals are well-positioned for continued success into the coming year.
The Do-It-Yourself aspects of the kitchen and bath remodels kicked in as soon as Americans began to sequester at home, Darcy says.
“Paint sales in big-box stores went up immediately, followed by more intensive home improvement projects.”
“Consumers have undertaken a lot of remodeling in 2020, but significant opportunity remains, especially for the kitchen and bath market, going into 2021,” notes Todd Tomalak, Principal at JBREC. “Much of the already completed renovation work has focused outside the home — redoing decks, gardens and outdoor entertaining spaces — in response to COVID-19 restrictions. For many families working and schooling from home, 2020 wasn’t the ideal time to redo a space as essential as the kitchen or bathroom. As such, we anticipate continued activity for kitchen and bath remodeling next year.”
In the first half of 2020, NKBA members predicted negative sales for the year, but Q3 brought better news for the industry, which now expects a 1.1% increase in YOY sales compared to 2019. In fact, Q3 sales in 2020 were up 2.1% from 2019, and sales grew 5.9% since last quarter overall — ranging from designers, who saw a smaller 3.2% increase, to manufacturers, who experienced a significant 9.6% rise.
More than half (62%) of all companies surveyed report COVID-19 drove higher demand to their business in Q3. While the crisis continues to have some adverse effect on the industry, with 29% reporting the pandemic has led to lower demand, its negative impact has lessened each quarter and, at 5.9 (on a scale of one to 10), is nearly 30% lower than the Q1 rating of 8.1. Among those industry professionals who haven’t seen demand return to normal levels, 29% expect it to do so in 2021.