Industry Pros Report Flat Revenue, Muted Consumer Demand in NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) Report

By NKBA Editorial Staff

While the kitchen and bath industry had been poised for a modest rebound in 2025, industry professionals are revising and slightly tempering their projection for growth this year, according to key findings in the NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) report.

The Kitchen & Bath Market Index (KBMI) dipped to 55.1 in Q1 2025 from 59.7 in Q4 2024 as consumer demand for kitchen and bath products weakened amid concerns about economic uncertainty and the impact of new tariffs and other policy shifts. Kitchen and bath firms in three of the four segments surveyed downgraded their ratings, reversing the upward trend previously seen across all segments last quarter.

K&B industry revenue growth was flat at +0.2% year over year (YOY) in Q1 2025, reversing the trend from Q4 2024 when sales rose. Industry pros say they expect this trend to continue: in Q1 2025, K&B firms’ 2025 revenue growth expectation averaged +3.1%, down from +3.7% in Q4 2024. However, if, as expected, prices rise by a similar or higher amount this year, flat or even negative unit sales volumes could become a reality.

The Kitchen & Bath Market Index Survey, which is the basis for the KBMI findings, is conducted jointly by the NKBA and John Burns Research and Consulting. The Q1 2025 report is based on findings from 734 members of the NKBA community across four primary industry segments: design; building and remodeling; retail sales; and manufacturing.

Here are some additional insights about the uncertain start to 2025 and the industry’s latest outlook for 2025:

A Significant Rise in Input Costs

K&B retail and distribution firms report that their suppliers raised prices by +5.2% YOY in Q1 2025, reversing previous progress on kitchen and bath product inflation. Markups in Q1 2025 were highest (+7% YOY) for appliances, which have heavy exposure to countries impacted by recent tariff policy shifts.

Many firms had no choice but to raise prices in response. Kitchen and bath builder and remodeler pricing grew to +5.2% on average in Q1 2025. Lead times in Q1 are extending for key products, including cabinets, vanities and major appliances.

Tariff Policy Uncertainty Looms Large

K&B professionals now rate trade issues as their number one concern impacting the industry. Retail segment firms are already reporting an uptick in product costs. The industry expects supply chain disruptions to increase and pricing to continue to drift upward as tariffs reshuffle the international trade balance.

Consumer behavior is being impacted by uncertainty around changing tariff policies. Two-thirds of K&B firms (68%) reported that consumers either held steady on product quality or downgraded to lower-grade products in Q1 2025, reflecting caution in the planning of kitchen and bath renovations.

Insights into Adaptive Strategies

For the first time, the Q1 2025 KBMI report includes insights from K&B firms about how they are coping with their greatest industry concerns, specifically regarding the cost of materials, trade issues and fear of a recession. Their strategies range from seeking out alternative products and suppliers to lowering their profit margins.

“There’s no doubt that uncertainty around tariff policies and other macroeconomic factors is heavily influencing the K&B industry’s more muted outlook for 2025, as well as consumer behavior,” said NKBA I KBIS Global President & CEO Bill Darcy. “As we wait for more answers to come into focus about the extent and longevity of these impacts, we know that our industry will continue to be resilient and find ways to meet these evolving challenges.”

Read more about what K&B industry pros are saying about the challenges and opportunities they see in the months ahead by downloading the NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) report here.

The essential hour-long webinar is now available on-demand.

By Nicholas Tamarin

The kitchen and bath industry is facing a dynamic economic landscape in 2025. Headlines, policy changes, and market signals are presenting new challenges that will significantly impact demand, project pipelines, and pricing power throughout the year.

To help industry professionals navigate this uncertainty, NKBA | KBIS and John Burns Research & Consulting just released a one-hour webinar delving into the latest economic developments through the lens of the Q1 2025 Kitchen & Bath Market Index (KBMI). This session is designed to provide timely and actionable insights, helping kitchen and bath professionals stay informed and make strategic decisions in a changing market.

What to Expect

The webinar features findings from leading experts, including Heather Shannon and Tricia Zach of NKBA | KBIS, and Nishu Sood and Elizabeth La Jeunesse of John Burns Research & Consulting.

• Macroeconomic Outlook: Sood provides an updated macroeconomic outlook for 2025, highlighting slowing job growth, rising recession risks, and the influence of media sentiment on market behavior. He also discusses major policy shifts, such as potential tariffs, and their anticipated impact on renovations, material costs, and labor availability. 
• Industry Perspectives: Zach and La Jeunesse share findings from the latest KBMI, drawing on input from professionals across design, construction, retail, and manufacturing. They examine how these segments are responding to current economic uncertainty, including the potential effects of new tariffs, rising product costs, labor shortages, and shifting consumer confidence.

Featured Presenters

Heather Shannon:  Senior Vice President, Marketing & Communications, NKBA | KBIS.

Tricia Zach: Head of Research, NKBA | KBIS.

Elizabeth La Jeunesse: Vice President of Building Products Research at John Burns Research and Consulting. La Jeunesse brings a wealth of experience in researching remodeling industry trends and macroeconomic forecasting, including previous work at the Federal Reserve Bank of St. Louis and Harvard’s Joint Center for Housing Studies.

Nishu Sood: Principal, John Burns Research & Consulting. Sood focuses on research across the residential sector and has extensive experience as a lead equity research analyst for the homebuilding and building products sector.

Head over here to view the webinar now!

New 2025 Kitchen & Bath Market Outlook and Q4 2024 Kitchen & Bath Market Index Reports Show Clear Signs of Expansion Despite Lingering Uncertainties

By NKBA Editorial Staff

Two new reports developed by NKBA’s research team provide a comprehensive analysis of kitchen and bath market trends and industry expectations for 2025. 

Following two consecutive years of slight contraction, the kitchen and bath industry is poised for modest but meaningful expansion in 2025, according to key findings from the NKBA / John Burns Q4 2024 Kitchen & Bath Market Index (KBMI) and the 2025 Kitchen & Bath Market Outlook reports.

The Kitchen & Bath Market Index (KBMI) rose to 59.7 in the final quarter of 2024, an increase from 53.4 in the previous quarter, indicating some signs of industry strength despite ongoing uncertainties. Demand for kitchen and bath (K&B) products and upgrades strengthened as sales rose slowly across all segments.

Here are some of the additional insights about the strong close to 2024 and the positive outlook for 2025:

Important Fourth Quarter Momentum 

Several key themes emerged from the Q4 2024 KBMI. Importantly, the Current Activity Index strengthened across all segments as industry pros report that consumer uncertainty appears to finally be ticking down with the resolution of the presidential election. K&B firms expect spending to increase with incremental confidence in the economy. More firms feel poised to meet their growth targets now, compared to Q3 2024, despite the lingering concerns around the skilled labor shortage and ongoing higher costs. Revenue growth averaged +3.4% year over year (YOY) in Q4 2024, as K&B manufacturers’ orders rose 2.5% and retailers’ sales grew by 4.4% YOY.

Positive Projections for 2025

K&B professionals expressed YOY revenue growth projections for 2025 ranging from +2.4% for retail sales firms to +7.5% for building and remodeling firms. Full-year 2025 revenue growth expectations averaged +3.7% YOY on a revenue-weighted basis. While existing home sales were down for the year, they increased during the final quarter of 2024. Remodeling-in-place appears to be a critical substitute for relocation moving forward. Only one in five K&B professionals say that weak existing home sales are holding them back.

The Big Picture: A Return to Gradual Growth

The NKBA Kitchen & Bath Market Outlook Report is more in-depth than ever — it now includes estimates for both consumer and investor K&B spending and insights from brand-new data sources. Based on this more sophisticated perspective, the report projects that U.S. residential kitchen and bath spending will grow by +0.8% to $235 billion in 2025 — up from $233 billion last year when applying the same new methodology.

Professional-led K&B remodels are expected to rise by 2.9% in 2025 and continue to outpace DIY activity (+0.6%) in 2025. In a reverse from 2024, remodeling spending on kitchen and bath products is expected to outpace new construction spending.

X-Factor #1: What Will the “Missing Middle” Do?

The big question for 2025 – one that will be key to a robust recovery in K&B remodels – is whether middle-income consumers will jump back into the renovation market after two years on the sidelines. These homeowners living in mid-range homes are the most likely to tap into home equity, but they’ve also proven to be the most rate sensitive. If short term borrowing costs drop, this critical group could finally embark on renovations in increasing numbers.

X-Factor #2: The Impact of Changing Federal Policies

The possibility of increased tariffs and changes to immigration policy could elevate the cost of kitchen and bath materials and labor. These potential policy changes present downside risk to the positive forecast for 2025, both directly through higher costs, and indirectly through the pace at which the Fed lowers interest rates if progress on inflation stalls in 2025.

“There’s no doubt this new research will be the subject of much conversation at KBIS 2025 as we explore where our industry is heading and why we feel hopeful and optimistic heading into Q2 and beyond,” said NKBA I KBIS Global President & CEO Bill Darcy. “While our industry is poised to finally realize much-anticipated growth in 2025, we have to keep a close eye on some key uncertainties that could hinder this expansion.”

For more insights into where the K&B industry is heading this year, download and read the full 2025 Kitchen & Bath Market Outlook and Q4 2024 KBMI reports.

Florida, Texas and Southeastern K&B Pros Anticipate Strongest Revenue Growth

By NKBA Editorial Staff

The Q3 2024 NKBA/John Burns Kitchen & Bath Market Index (KBMI) includes important regional insights that reflect a generally static 2025 for the kitchen and bath industry as a whole, but also offers some clear signs that professionals believe a period of substantial growth is on the horizon.

K&B sales growth year- over year (YOY) was slowest in California, Texas and the Southwestern U.S. during the last quarter, according to the industry professionals surveyed. There were, however, indications of an upswing in other parts of the country. Most notably, K&B pros in the Southeast reported solid 8% YOY growth, while those in the Midwest (6%) and Northwest (6%) also cited positive results. Firms in Florida and Hawaii both cited an uptick in renovations following recent storms and the ongoing recovery from the 2022 Maui wildfires.

U.S.-based K&B firms, on average, expect to see revenue growth of 8% in 2025. Those solid projects are driven, in large part, by optimism from surveyed professionals in Florida, Texas and the Southeast region – all report expected growth of 10% or more next year.

Here are some additional regional highlights from the Q3 2024 KBMI report:

Slow Sales in the Southwest and California

Sentiment from California-based pros reflected ongoing uncertainty about several factors, including the election, the economy, and higher costs. Southwest firms also commented on the persistent divide between wealthy and more reluctant middle-income consumers. Despite these challenges, K&B professionals in these areas anticipate 2025 growth of 7-8% on average.

Southeast Firms Lean Into Proactive Business Strategies  

Companies across the Southeast described steps they will take in the new year to achieve their hoped-for 10% average growth rate. Examples include upgrading showroom displays, increasing marketing spending, networking with builders, and stepping up their media activities.

In the Midwest, New York and New Jersey, Gen-X and Millennials are Actively Renovating

Kitchen and bath professionals in the Midwest region, including Illinois, noted stronger Gen-X and millennial performance. On average, pros in the region expect revenue growth of 8%. Similar sentiments were reported by pros in the New York/New Jersey area.

“Industry pros across the country are reporting very positive expectations for the coming year, anticipating that, over time, the considerable pent up demand for K&B renovations will start to translate into more active projects,” said Bill Darcy, Global President & CEO, NKBA | KBIS. “It’s clear that K&B firms have been smart in weathering a challenging year, and are being equally strategic as they prepare to capitalize on growth opportunities in 2025.”

To access additional regional data and insights, download the full Q3 2024 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report here.

Moving Beyond an Extended Period of Economic and Political Uncertainty

By NKBA Editorial Staff

The final quarter of 2024 is likely to be a fitting conclusion to a year of modest growth, dominated by persistent economic and political uncertainty. However, K&B companies are looking ahead to next year with considerable optimism. The hundreds of K&B pros surveyed for the Q3 2024 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report shared expectations of very healthy growth in revenue in the coming year, averaging 8% across all segments of the industry.

In Q3 2024, the KBMI Index was essentially flat, rating 53 out of 100, a slight one-point decrease from the previous quarter (ratings above 50 reflect expansion in the sector). Conducted jointly by the National Kitchen & Bath Association and John Burns Research and Consulting, the KBMI report includes data and insights from the NKBA Community across four segments: design, building and construction, retail and manufacturing.

Here are some additional highlights from the Q3 2024 KBMI report:

Economic and Political Uncertainty Translate to Stagnancy

Demand for kitchen and bath products and upgrades remained stagnant amid economic and political uncertainty weighing on U.S. consumers this year. In Q3, kitchen and bath professionals downgraded their 2024 revenue growth outlook to 1.3% year over year (YOY) on average, down from 2.7% the previous quarter. While the Fed lowered interest rates in September, many consumers are still waiting to see more significant reductions in borrowing rates. Indications are that more favorable borrowing rates, as well as a resolution to the contentious political season, will move more homeowners to finally pursue their renovation projects.

A Notable Bright Spot: Retail

One sector that stood out for its optimistic take was retail — firms’ overall KBMI rating strengthened substantially during Q3, up 4.5 points to 52.5, in part due to the anticipation of better economic times ahead. In the Current Kitchen & Bath Activity Index for the quarter, which rates current quarter residential kitchen and bath sales compared to one year ago, the retail sales sector showed considerable strength (up 7.7 points). Retail was the only sector to predict increased sales for the final quarter of the year.

Ongoing Impact of the Skilled Labor Shortage

After consumer uncertainty (51%), the next biggest constraint to growth cited by surveyed K&B pros was the persistent shortage of skilled labor (33%). More than a quarter (29%) cited high materials costs. Weak existing home sales ranked lower this quarter, with only 19% of firms saying it is holding them back.

Slow End to 2024, with Major Optimism About 2025

The current year is ending on a neutral note. Revenue growth for K&B projects and services averaged 0.7% YOY in the third quarter. But K&B pros broadly expect the market to make a solid recovery in 2025. Professionals’ expectations for 2025 revenue growth ranged from 4 to 9% YOY, with smaller firms – which tend to experience more volatility in sales over time — expecting higher growth on average. The design (9.2%) and manufacturing (9%) sectors are especially bullish, anticipating the highest revenue growth next year. Building & construction was not far behind (8.3%). The retail sector reported the most conservative growth expectations for 2025 at 4.2%.

“There is no denying that 2024 is turning out to be a stable but largely underwhelming year for our industry,” said Bill Darcy, Global President & CEO, NKBA | KBIS. “With the Fed’s initial interest rate cut and the likelihood of more reductions to come, as well as the imminent conclusion to a highly intense political season, K&B pros are telling us that they expect to see steady growth finally start to take root after the new year.”

For additional data and insights, download the full Q3 2024 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report here.

New Geographic Insights from the NKBA | KBIS Q2 2024 Kitchen & Bath Market Index Report 

By NKBA Editorial Staff

For the first time, the Q2 2024 Kitchen & Bath Market Index report includes geographic insights by segment, offering another layer of information about emerging regional trends.

Q2 2024 sales for the K&B industry slowed across much of the country, including the Southwest (-5 percent year-over-year) and Southeast (-3 percent), with the exception of Florida (+6 percent). Modest growth was reported in the Northwest (+2 percent), Midwest (+1 percent) and Northeast (+2 percent) regions.

Other trends emerging from K&B firms across the nation included:

“Missing Middle” on the West Coast

California firms surveyed repeated the theme of a bifurcated market – demand remains strong for high-end renovations, while homeowners are more hesitant about pursuing mid-sized renovation projects right now.

Pockets of Growth in the Southwest

Southwest firms described pockets of strength for new construction K&B activity, and many expect a return to broader growth by the end of the year.

Consumer Uncertainty in the Northwest

Consumer uncertainty dampened activity in the Northwest, with high prices and interest rate pressures weighing heavily. Idaho was a notable bright spot in terms of demand.

Labor Concerns in the Midwest

In the Midwest, lack of skilled labor remains a chronic concern and a barrier to moving forward with major K&B renovations.

Northeast Remains Resilient

Northeast firms report slowing sales but continued resilience from wealthier segments. Millennials, though generally budget-conscious, are providing an unexpected boost – defying a trend seen in other parts of the country.

A Mixed Bag in the Southeast

Southeast firms report mixed conditions; some see continued strength, while others cite consumer hesitancy. High-end remodeling in Florida remained strong, perhaps fueled in part by homeowners who have recently resettled from other parts of the country.

“While market conditions and trends vary from region to region, there are some consistent themes that will probably come as no surprise to industry professionals,” said Bill Darcy, Global President & CEO, NKBA | KBIS. “Many homeowners are still being cautious about spending, and the youngest homeowners, in particular, are turning to online merchants and seeking better deals from contractors. Meanwhile, Boomers tend to be the most reliable consumers and are, in many ways, continuing to drive modest growth in the K&B sector.”

You can read more insights from K&B companies across the country by downloading the Q2 2024 NKBA/ John Burns Kitchen & Bath Market Index (KBMI) report here.

The Sector Leads the Way in Current Growth, Annual Projections in the Q2 2024 Kitchen & Bath Market Index

By NKBA Editorial Staff

While the outlook from most areas of the K&B industry remained relatively flat during the past quarter, the Building & Construction sector continues to be a bright spot. Building & Construction professionals surveyed for the Q2 2024 NKBA/ John Burns Kitchen & Bath Market Index (KBMI) are the most optimistic about growth this year.

Overall, K&B professionals downgraded 2024 revenue growth expectations to 2.7 percent on average – less than half (5.7 percent) compared to the previous quarter — as an anticipated recovery is being pushed out toward year-end. However, Building & Construction firms bucked this trend, holding their full-year 2024 outlook for residential K&B sales growth steady (4.1 Q2 vs. 4.4 Q1).  

Here are some other examples of positive data and sentiment shared by B&C pros:

B&C Growth Helps Offset Retail Losses

The KBMI rated 53.7 on a 100-point scale in Q2 2024, down from 56.3 in Q1 2024. The retail sales segment downgraded its market outlook to 48, down 8.3 points as foot traffic stalled quarter-over-quarter. Building and construction firms remained more positive, outperforming the overall index (58.1, up +2.5 from Q1 2024) – the only sector to show an uptick in the KBMI.

An Increase in Current Activity and Overall Health

The Current Activity Index — a measurement of K&B firms’ reported expanding/ contracting of sales conditions — weakened overall in Q2 2024, particularly in the retail sales and manufacturing segments, as demand softened year-over-year. Building & Construction firms again bucked the trend here, increasing to 52.8 (+4.8 QOQ). Meanwhile, optimism from B&C pros (62, +2.1 QOQ) boosted the Q2 Kitchen and Bath Industry Health Index (Q2 2024), firms’ rating of the overall health of their segment of the industry.

More Completed Projects, Fewer Canceled or Postponed

The Building & Construction sector reported being less impacted by canceled or postponed projects. Its share of planned residential kitchen and bath projects that did not proceed actually declined from the previous quarter (6 percent canceled, 6 percent postponed in Q2 vs. 8 percent canceled, 9 percent postponed in Q1). Completed K&B renovation/construction projects grew by 2.3 percent vs. a year ago following three straight quarters of decline —a positive sign amid an overall inconsistent market.

Larger Projects, Longer Backlogs

Remodelers reported that K&B project sizes/scopes increased in Q2 2024 as wealthier homeowners continue to be more likely to push ahead with projects. Compared to last year, the average project grew either significantly (16 percent) or somewhat (38 percent). K&B renovation and construction backlogs (2.8 months) are relatively low, but stable, for the third consecutive quarter, likely correlating to the prevalence of larger projects that take longer to complete.

Optimism About Annual Growth

More than two-thirds (77 percent) of surveyed companies in the Building & Construction segment expect stable (29 percent) or higher (48) revenue growth in 2024, down slightly from Q1 2024.

“The Building & Construction sector remains bullish, which should be a source of encouragement for the entire K&B industry,” said Bill Darcy, Global President & CEO, NKBA | KBIS. “Despite the challenges of the current economy, K&B professionals across the board generally feel hopeful and our industry remains resilient as we wait for conditions to become more favorable for all homeowners.”

For more insights, download the Q2 2024 NKBA/ John Burns Kitchen & Bath Market Index (KBMI) report here.

Latest Kitchen & Bath Market Index (KBMI) Dips Slightly, but Still Reflects Modest Growth in 2024

By NKBA Editorial Staff

The narrative emerging from the most recent research by NKBA | KBIS, including the new Q2 2024 NKBA/John Burns Kitchen & Bath Market Index (KBMI), remains remarkably consistent: ongoing uncertainty about economic conditions is making most consumers extremely cautious about big purchases, including major kitchen and bath renovations. This has translated into an increasingly static market and K&B professionals downgraded their 2024 revenue growth expectations to 2.7 percent  year-over-year (YOY) on average, compared to 5.7 percent in Q1. One exception is building and construction firms, which held their full-year 2024 outlook steady.

In Q2 2024, the KBMI Index rated 54 out of 100, down two points from the previous quarter, reflecting modest expansion in the sector. Conducted jointly by the National Kitchen & Bath Association and John Burns Research and Consulting, the KBMI report includes data and insights from NKBA members across four segments: design, building and construction, retail and manufacturing.

Here are some additional key highlights from the Q2 2024 KBMI report:

Muted Sales Activity

Sales of new K&B projects and services increased 0.9 percent YOY in Q2 2024, although with prices growing by a larger amount, this signals low-single-digit negative volume. K&B retailers reported that foot traffic declined 5 percent quarter-over-quarter (QOQ) amid inconsistent demand. Many brick-and-mortar retailers cited intense competition from online retailers.

Rising Prices, Across the Board

K&B firms reported that their suppliers raised prices by 3.9 percent YOY in Q2 2024, up from 3.4 percent  in Q1. Markups were highest for hardware, mirrors, vanities, refrigerators and tile. Meanwhile, K&B firms’ average pricing rose 2.8 percent YOY in Q2. Building and construction firms reported the largest price hikes of 4.0 percent YOY for the quarter. The average expectation for full-year 2024 price increases is now 3.9 percent, varying by K&B segment.

The “Missing Middle”

Most industry growth is happening at the extremes — low-end and large, high-end projects — as many homeowners stay on the sidelines for now. High-end projects are growing larger and more luxurious as wealth trends diverge among U.S. homeowners. The good news: all of these deferred mid-range renovations will prime the market for growth once economic conditions improve.

Consumer Uncertainty is Hampering Growth

K&B firms cited consumer uncertainty (44 percent) as the most significant barrier to realizing stronger growth, followed by the skilled labor shortage (32 percent) and higher material costs (26 percent). Weak existing home sales (22 percent) and high financing costs for renovations (22 percent) were also important factors.

“Consumer confidence is lagging behind evidence that the U.S. economy remains resilient, overall,” said Bill Darcy, Global President & CEO, NKBA | KBIS. “High consumer prices and elevated borrowing rates are preventing the majority of homeowners who have plans or aspirations to undertake K&B renovations from moving forward right now. In the meantime, K&B growth will largely be powered by high-end renovations at one extreme and DIY projects at the other.”  

For additional data and insights, download the full Q2 2024 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report here. 

Older, More Affluent Homeowners Lead the Way

One of the clear takeaways from the Q1 2024 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report is that the market for high-end K&B projects remains resilient and mostly immune to higher prices and stubbornly inflated borrowing rates. It’s also evident that many of the high-income homeowners moving forward with these renovations are older Gen X and Boomer consumers, who remain a focus of industry professionals. Meanwhile, middle-income consumer demand has become weaker.

Overall the KBMI results are looking increasingly optimistic, driven in large part by big-ticket renovation projects. Lead quality improved in Q1 2024 for high-end/luxury projects, signaling profit potential for firms concentrating on projects with budgets of $150k or more.

On the other end of the spectrum, industry pros say that more modestly priced homes are underperforming. Younger households are struggling with affordability concerns, which is hampering overall growth. The one outlier: millennials in the Southwestern U.S., a nascent area of growth, according to surveyed remodelers.

As a result of these trends, many of the surveyed firms said they are increasingly catering to clients with high disposable income and the ability to start projects now. Design professionals, for example, view resilient high-end consumers as a continued growth area for their industry, and lead quality for high-ticket jobs has increased. In the building and construction sector, project scopes have increased, a likely indicator of a narrower pool of wealthier homeowners pursuing sizable projects.

While industry pros report that most U.S. consumers are still experiencing sticker shock at higher K&B prices — general pricing for building products, for example, is up 40% since pre-Covid — their Gen X and Boomer clients are still proceeding with remodels to address family and lifestyle needs, such as retirement and aging-in-place. Lead quality continued to increase at the high end, and projects priced over $100K yielded increasing profit potential in the first quarter.

These findings align with insights from a recent NKBA-commissioned report conducted by Zonda on luxury K&B consumers. The report said that “remodeling spending among high-income households will stabilize and outperform the broader market, while remodeling spending from middle-income households is contracting.” It predicts that while DIY spending will soften in the first half of the year, pro remodeling market should continue to build in the second half of the year and beyond, largely thanks to high-end projects. Wealthier homeowners are feeling more positive about investing in major home purchases as compared to their middle-income counterparts, reversing a recent trend.

“High-income homeowners are clearly the difference-makers in keeping the K&B industry stable and trending upward as we await an expected period of more significant growth later in the year and into 2025,” said Bill Darcy, Global President & CEO of NKBA | KBIS. “As middle-income households take a beat and wait for interest rates to moderate, luxury K&B consumers’ projects are sustaining demand for professional remodeling.”

To read more insights about key, early trends in the K&B market this year, download the full Q1 2024 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report here.

Manufacturers Project the Strongest Revenue Growth of any Sector through 2024

By NKBA | KBIS Editorial

The Kitchen & Bath Market Index (KBMI), a leading indicator of the U.S. K&B market performance, rose during the first quarter of 2024 – another positive indication that the industry has held steady and is entering a period of growth. Some of the most significant signs of a recovery come from the manufacturing segment, which led the post-Covid recovery four years ago.

Data and insights released as part of the Q1 2024 KBMI report reflect why the manufacturing sector reported the strongest optimism of any of the four surveyed industry segments (design, retail sales, manufacturing, building & construction) about potential revenue growth this year.

 Here are a few highlights:

• The manufacturing sector’s index of 58 outpaced the overall 56.4 Index rating, which measures current sales growth, industry health, and near-term growth expectations among U.S. kitchen and bath industry pros.
• Surveyed manufacturers expect 6.8 percent revenue growth for 2024 vs. the 5.7 percent average for all four segments. This includes solid projections of short-term growth.
• Despite a slight dip in the current Q1 K&B Activity Index, manufacturing still had the highest Activity and Health Index numbers of any sector.
• Manufacturing and distribution firms began the year positively, with orders rising by 4.2 percent YOY in Q1 2024; they report solid near-term sales expectations.
•  Inventories remain relatively balanced, and most manufacturers reported having balanced/normal capacity. Only 18 percent reported having significant excess capacity.
• Manufacturers are prioritizing investment in R&D in new products (49 percent), as well as training/upskilling (46 percent) and supply chain management improvements (42 percent).  

One notable bright spot in the K&B manufacturing sector was the cabinet shop sub-segment, which saw very strong year-over-year order growth of 10 percent in Q1 2024. Shop owners expressed optimism that demand would continue to be strong over the next six months.

“The manufacturing segment remains a critical bellwether of the health of the K&B industry,” said Bill Darcy, Global President & CEO of NKBA | KBIS. “Despite the dampening effect of persistently high borrowing rates, manufacturers are telling us that they are optimistic about the year ahead, an encouraging sign for the entire industry.”

For more insights and data about the manufacturing sector’s performance, download the full Q1 2024 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report here.