Kitchen & Bath Market Index (KBMI)
National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting have partnered on the Kitchen and Bath Market Index (KBMI), a barometer of the business health of the industry
This quarterly industry index gauges the economic pulse of the kitchen and bath market, examining current conditions and future expectations in the industry. It also monitors issues and challenges industry professionals are facing in their businesses. The KBMI surveys and analyzes the sentiments of designers, manufacturers, retailers and building/construction firms who are members of the NKBA.
“As the leading trade association and advocate for the kitchen and bath industry, we continuously invest in research to provide guidance on performance, projections and challenges in the sector for our members and the market. We’re pleased to see that despite a softening in housing, the KBMI indicates positive growth and an optimistic sales outlook in the kitchen and bath sectors,” said Bill Darcy, NKBA CEO. “John Burns Real Estate Consulting is the preeminent research analysis partner in the housing space and we embarked on this joint venture to provide a reliable and frequent metric of industry performance and business health to our members and the market.”
“We are thrilled to partner with NKBA to monitor this important segment of the economy,” said Todd Tomalak, Senior Vice President of Research for John Burns Real Estate Consulting. “We view Kitchen & Bath as a critical gauge of discretionary consumer spending, and this new index will allow analysts to monitor the segment with more confidence than ever before.”
Quarterly Distribution (Q2 2019 Report Available for Download)
Fill out the form below to download the full Q2 2019 Kitchen and Bath Market Index (KBMI).
The industry continues to grow, but our survey shows a clear shift in expectations for 2019. Our survey shows:
- Expansion continues in Q2. The kitchen and bath industry expanded in Q2 2019, as the KBMI remained above 50 at 65.7 on a scale of 0–100, with 50 being flat. Q2’s KBMI is notably weaker than the previous two quarters’ ratings of 71.0 and 69.2, as industry members report rising costs and a shift in demand to lower-priced products.
- Future industry outlook remains positive. The industry is still more positive on future conditions (69 index reading) than on current conditions (63 index reading), but 2019 sales growth expectations moderate downward due to declining per sale revenue and rising material and labor costs.
- The industry now expects 4.7% full-year sales growth in 2019, down slightly from 5.4% expected growth reported by NKBA members last quarter.
- Big shift underway: Rising costs are driving shift to smaller projects, more affordable finishes.
- Increases in average customer spending are being driven by material and labor cost inflation.
- Decreases in budget sizes are being driven by shift to more affordable, lower-priced options.
- The big three challenges and concerns of the industry remain the availability of skilled labor, cost of materials, and trade issues.
- NKBA members across manufacturing, building/construction, retail/sales, and design have highlighted their biggest barriers to growth, the impact it has had on their businesses, and how they are changing to overcome them. Please see pages 21–27 in the report for more detail.
- Designers say higher total project costs and declining consumer confidence are causing consumers to shift to lower price point kitchen and bath products and finishes. Designers report they are offering more lower-price point big-ticket options like cabinets and fixtures to appeal to the increasingly price sensitive consumer.
- Building and construction companies cite that the lack of skilled subcontractors in the market is preventing them from doing more projects. Remodeling companies say they are investing in project management software to create efficiencies as availability of trades worsens.
- Retail/sales companies say flattening real estate values, economic uncertainty, and higher product costs are negatively impacting clients’ urgency and budgets.
Brick and mortar retailers also report it’s increasingly more difficult to compete with e-tailers, which is causing many of these companies to adopt new business models that enable bundling of more value-added services like design and construction.
- Manufacturers report increasing labor and material costs are their biggest barriers to increasing capital expenditures. Many express a need to drive operating efficiencies to improve financial position and better compete and invest in their business.
The Q2 2019 survey results include 457 responses from manufacturers, retailers, building and construction companies, and design firms who are members of the National Kitchen and Bath Association.
About NKBA and John Burns Real Estate Consulting
About the National Kitchen & Bath Association and the Kitchen & Bath Industry Show
The National Kitchen & Bath Association (NKBA) is the not-for-profit trade association that owns the Kitchen & Bath Industry Show® (KBIS), as part of Design & Construction Week® (DCW). With more than 10,000 member companies representing tens of thousands of members in all segments of the kitchen and bath industry, the NKBA has educated and led the industry since the association’s founding in 1963. The NKBA envisions a world where everyone enjoys safe, beautiful and functional kitchen and bath spaces. The mission of the NKBA is to inspire, lead and empower the kitchen and bath industry through the creations of certifications, marketplaces and networks. For more information, visit NKBA.org or call 1-800-THE-NKBA (843-6522).
KBIS® and NKBA® are registered trademarks of the National Kitchen & Bath Association.
About John Burns Real Estate Consulting
John Burns Real Estate Consulting is an independent research provider and consulting firm focused on the housing industry. John Burns founded the company in 2001 because he saw a need for better analysis on the housing market. The company has grown to a highly passionate team of research analysts and consultants in offices across the country, who work together to provide the most trusted source of US housing analysis. John Burns Real Estate Consulting’s research subscribers receive the most accurate analysis possible to inform their macro investment decisions, and the company’s consulting clients receive specific property and portfolio investment advice designed to maximize profits.
If you have any questions about the KBMI or if you would like find out how John Burns Real Estate Consulting can help your business, please contact Sara Newton-Mahony, Client Relations Manager at (949) 870-1252 or at firstname.lastname@example.org.