Kitchen & Bath Business - July/August 2020 - 26

RESEARCH ROUNDUP

2020 Forecast: Projected Growth by Construction Type
Residential Kitchen and Bath
Spending ($ Billions)

Updating the
2020 Outlook

2020 Growth

$130.8
Forecast range: -17.0% to - 6.4%

N K B A's a n n u a l b u s i n e s s
projections are revised to
account for the effects of
the COVID-19 pandemic

New Construction

$72.6

Forecast range: -17.0% to - 5.0%
WHEN THE CALENDAR PAGE FLIPPED to a new
decade back in January, prospects for business
in the kitchen and bath design and remodeling
industry looked bright. Housing markets were
vibrant - always a good sign for remodeling - and
the economy was humming along, a harbinger
of robust activity in the kitchen and bath sector.
Then the calendar flipped to March, and the
world turned upside down.The deadly novel coronavirus, already paralyzing many parts of Asia and
Europe, invaded North America, throwing the
economy into a tailspin, shutting down business
across the U.S.and Canada literally overnight.Millions lost their jobs, more than 100,000 in the U.S.
alone perished,and projections for a rosy year ahead
- with nearly 7 percent growth - were crushed.

Remodel

$58.2
Forecast range: -17.0% to - 8.0%
Sources: Census AHS Microdata, NAA, HIRL, John Burns Real Estate Consulting LLC (Pub: June 2020)
All dollars include both products and labor (installed costs).

report projected a strong 2020, bolstered by an especially bright first quarter.
While the COVID-19 crisis, unsurprisingly, led to a double-digit decline in
spending across all major categories, we are already seeing signs of positive
growth as shelter-in-place orders are lifted, and we're optimistic about the
industry's long-term health."
NKBA commissioned the highly regarded John Burns Real Estate Consulting firm ( JBREC), which initially helped produce the 2020 Kitchen &
Bath Market Outlook, to provide an extensive update because of the impact
of COVID-19. Based on new feedback from a survey of 500 consumers
engaged in or planning kitchen and bath remodeling/renovation projects, the
research includes new sections on the pandemic's effects on project spending
and consumer behavior.
For remodeling, spending values are JBREC calculations from tabulations
of U.S. Census American Housing Survey home-improvement projects
microdata, NAA spending (on rental units), JBREC home-improvement
estimates and forecasts of single-family rental and owner-occupied renovation spending.
For new construction, which includes single-family and multi-family units,
JBREC analyzed construction costs for spending by category within newhome kitchens and bathrooms. Homes were segmented by size and price
point. Because of regional differences in home price points, segmentation
was conducted by nine census divisions, then rolled up.

NECESSARY SURVEY REVISIONS

To provide a comprehensive view of the U.S. residential kitchen and bath industry and evaluate the
continuing impact of the pandemic on 2020 business, NKBA updated its annual market outlook
survey, initially conducted before the crisis hit.
Unsurprisingly, the revised research predicted a
slowdown in kitchen and bath spending to $130.8
billion, an 11.7 percent drop from $148.1 billion
spent in 2019.This will be driven by an 8.7 percent
falloff in new construction and a 15.2 percent
decline in remodeling.
Of the $130.8 billion, 46 percent, or $60.4 billion, is attributable to kitchens, with the remaining 54 percent, or $70.4 billion, coming from
bathroom expenditures. All dollar figures reflect
installed costs, including all major elements within
kitchen and bath spending (plumbing fixtures,
faucets, tile, vanities, countertops, lighting, showers and baths, etc.), as well as design and labor.
"Our initial 2020 Kitchen & Bath Market Outlook was conducted in late 2019, before the pandemic hit our members and homeowners in the
U.S. and Canada," said Bill Darcy, NKBA CEO.
"Kitchen and bath spending had been increasing steadily prior to the pandemic at 9 percent in
2018 and 4 percent in 2019. As such, the original

26
26-28_KBB_0720_ResearchRoundup.indd 26

KEY HIGHLIGHTS

As of mid-April, 81 percent of kitchen and bath remodeling projects had been

By DIANNE M. POGODA

postponed or cancelled, but homeowners said they planned to reschedule 70
percent of those projects in 2020 - an encouraging sign.
The industry is expected to face double-digit declines in both kitchen and bath
spending as a result of pandemic-related disruptions to the economy and to
consumer finances and behavior.
Kitchen spending was more impacted than that of bathrooms, declining by 25
percent compared to 18 percent for master bathrooms and 14 percent for
secondary baths.

/ JULY-AUG. 2020 / KBBONLINE.COM / The official publication of NKBA (NKBA.org) and KBIS (KBIS.com)

7/13/20 8:58 PM

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Kitchen & Bath Business - July/August 2020

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