Kitchen & Bath Business - November/December 2020 - 18

RESEARCH ROUNDUP

be highly disruptive and also likely unsafe from a
social-distancing standpoint. Plus, there's usually
only one kitchen in a house, and dining-out options are limited in many areas. 
MOTIVATIONS AND OBSTACLES

An Optimistic Outlook

Industry revenues are revised upward, as active K&B projects
nearly double from Q1 to Q2

NKBA RELEASED A SEPTEMBER REVISION of its annual " 2020 Kitchen and
Bath Market Outlook, " the second since the start of the pandemic. The big
picture predicts that a rebound is clearly in the making.
K&B industry revenues ended 2019 at a strong $148 billion. There
was every reason to believe 2020 would build on that momentum. Then
COVID-19 happened. An initial revision called for a double-digit drop of
nearly 12 percent, to $131 billion.The latest update, however, delivers a more
positive assessment. Full-year revenue projections have been raised to $139
billion, just 6 percent below 2019 totals.

ABOVE Photo by Zakhar
Marunov, Adobe Stock

UNEVEN PROGRESS

Although across-the-board trends have markedly improved since Q1, not
all progress is created equal. For instance, while new construction spending
is now forecast to be off by just 3 percent for the year - remarkable when
compared with the hit taken by most other industries - kitchen and bath remodeling revenue is projected to be down by nearly 10 percent.This is largely
because of a downsizing of the average project, with DIY activity growing by
40 percent in Q2 over Q1. Clearly, economic uncertainty and fear of workers
in their homes because of COVID-19 are taking their toll.
On the plus side, and this is a big plus, 36 percent of homeowners were
actively working on K&B projects in Q2, compared to just 19 percent in Q1.
Additionally, 42 percent of kitchen and primary bathroom remodels in Q2
were for homes under 20 years old. This compares to just 35 percent and 33
percent, respectively, for homes over age 40, which is traditionally the largest
remodel group. Increased time spent at home is a major contributor because
imperfections and obsolete features are now being noticed more, and there's
more time available to get the job done.
The kitchen/bath dynamic also seems unusual at first glance. While bathroom redesigns are moving solidly ahead, projected to be down less than 1
percent vs. last year despite the pandemic disruptions, kitchens are facing
a 12 percent shortfall. How can that be? The explanation is actually quite
logical. As more family members are at home for longer periods of time,
upgrading secondary bathrooms has become more urgent and can often be
performed piecemeal, through DIY at a reasonable cost. And, there are usually other bathrooms in the house. Kitchens, on the other hand, have been
turned into the family gathering ground. A remodel of that space would

18

Five reasons stood out in the list of motivations
for moving forward with projects in Q2.Topping
the list, cited by 20 percent of the online panel,
was the need to replace worn-out features, which
clearly become more noticeable with additional
time spent at home. Repairing damage was next, at
15 percent, closely followed by the need to update
the home's design, at 14 percent. Tied for fourth
were a wish to increase home value and the desire
to add luxury to the home, at 13 percent each. In
contrast to the previous quarter, much of the work
performed in Q2 was focused on replacements
and repairs rather than full-scale remodels.
On the flipside, respondents who cancelled Q2
projects were also asked to provide reasons. Obviously, the pandemic was front and center, with
55 percent identifying it as the cause for project
delays and postponements. Next up, at 34 percent,
was project cost, which had been identified as the
main barrier by just 27 percent in Q1. Other reasons were that the timing, although unrelated to
the pandemic, was bad, and having to deal with
unexpected problems both related and unrelated
to the project.   
MULTIPLE DRIVERS MOVING FORWARD

By ROBERT ISLER,
Market Research
Analyst, NKBA

Despite continued uncertainties, a series of positive factors bodes well for the future of K&B. First,
the pace of construction industry activity is not
letting up. In fact, new home starts for July were
up by 33 percent year-over-year, its largest increase
since 2015. Kitchen and bath product installations
typically lag housing starts by two to three months.
Also, mortgage applications to purchase a new
home have rebounded sharply since the pandemic
plunge and are now higher than they were before
COVID-19 hit.That makes perfect sense. Mortgage rates are almost a full point below year-ago
levels, which translates into an additional 4.5
million households meeting the criteria for a
$200,000 mortgage. Then there is the record low
housing inventory for sale, which has started to
translate into greater home appreciation, something that correlates with higher-end remodels.
Finally,moving past the housing picture and into
the economic arena, small business hiring plans
have been on the rise,with jobs planned for the next
three months now above the long-term average.It's
just one more encouraging factor for an industry
that, although it hasn't all been clear sailing, has
weathered the storm far better than most.


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


http://www.KBBONLINE.COM http://www.NKBA.org http://www.KBIS.com

Kitchen & Bath Business - November/December 2020

Table of Contents for the Digital Edition of Kitchen & Bath Business - November/December 2020

Kitchen & Bath Business - November/December 2020
Contents
Editor’s Note
Show Note
NKBA Note
Happenings
Trends
Better Business
Skill Set
Hot Topic
Learning Corner
Special Section
KBIS 2021
Favorites
Universal Design
Color Find
Solutions
Small Spaces
What’s Hot
Last Word
A designer overcomes challenges and creates a one-of-a-kind kitchen
Kitchen & Bath Business - November/December 2020 - Kitchen & Bath Business - November/December 2020
Kitchen & Bath Business - November/December 2020 - Cover2
Kitchen & Bath Business - November/December 2020 - 1
Kitchen & Bath Business - November/December 2020 - Contents
Kitchen & Bath Business - November/December 2020 - 3
Kitchen & Bath Business - November/December 2020 - 4
Kitchen & Bath Business - November/December 2020 - 5
Kitchen & Bath Business - November/December 2020 - Editor’s Note
Kitchen & Bath Business - November/December 2020 - 7
Kitchen & Bath Business - November/December 2020 - Show Note
Kitchen & Bath Business - November/December 2020 - 9
Kitchen & Bath Business - November/December 2020 - NKBA Note
Kitchen & Bath Business - November/December 2020 - 11
Kitchen & Bath Business - November/December 2020 - Happenings
Kitchen & Bath Business - November/December 2020 - 13
Kitchen & Bath Business - November/December 2020 - 14
Kitchen & Bath Business - November/December 2020 - 15
Kitchen & Bath Business - November/December 2020 - 16
Kitchen & Bath Business - November/December 2020 - 17
Kitchen & Bath Business - November/December 2020 - 18
Kitchen & Bath Business - November/December 2020 - 19
Kitchen & Bath Business - November/December 2020 - Trends
Kitchen & Bath Business - November/December 2020 - 21
Kitchen & Bath Business - November/December 2020 - 22
Kitchen & Bath Business - November/December 2020 - 23
Kitchen & Bath Business - November/December 2020 - Better Business
Kitchen & Bath Business - November/December 2020 - 25
Kitchen & Bath Business - November/December 2020 - Skill Set
Kitchen & Bath Business - November/December 2020 - 27
Kitchen & Bath Business - November/December 2020 - Hot Topic
Kitchen & Bath Business - November/December 2020 - 29
Kitchen & Bath Business - November/December 2020 - Learning Corner
Kitchen & Bath Business - November/December 2020 - 31
Kitchen & Bath Business - November/December 2020 - Special Section
Kitchen & Bath Business - November/December 2020 - 33
Kitchen & Bath Business - November/December 2020 - 34
Kitchen & Bath Business - November/December 2020 - 35
Kitchen & Bath Business - November/December 2020 - KBIS 2021
Kitchen & Bath Business - November/December 2020 - 37
Kitchen & Bath Business - November/December 2020 - 38
Kitchen & Bath Business - November/December 2020 - 39
Kitchen & Bath Business - November/December 2020 - Favorites
Kitchen & Bath Business - November/December 2020 - 41
Kitchen & Bath Business - November/December 2020 - Universal Design
Kitchen & Bath Business - November/December 2020 - 43
Kitchen & Bath Business - November/December 2020 - Color Find
Kitchen & Bath Business - November/December 2020 - 45
Kitchen & Bath Business - November/December 2020 - Solutions
Kitchen & Bath Business - November/December 2020 - 47
Kitchen & Bath Business - November/December 2020 - Small Spaces
Kitchen & Bath Business - November/December 2020 - 49
Kitchen & Bath Business - November/December 2020 - What’s Hot
Kitchen & Bath Business - November/December 2020 - 51
Kitchen & Bath Business - November/December 2020 - 52
Kitchen & Bath Business - November/December 2020 - 53
Kitchen & Bath Business - November/December 2020 - A designer overcomes challenges and creates a one-of-a-kind kitchen
Kitchen & Bath Business - November/December 2020 - 55
Kitchen & Bath Business - November/December 2020 - 56
Kitchen & Bath Business - November/December 2020 - 57
Kitchen & Bath Business - November/December 2020 - 58
Kitchen & Bath Business - November/December 2020 - 59
Kitchen & Bath Business - November/December 2020 - 60
Kitchen & Bath Business - November/December 2020 - 61
Kitchen & Bath Business - November/December 2020 - 62
Kitchen & Bath Business - November/December 2020 - 63
Kitchen & Bath Business - November/December 2020 - Last Word
Kitchen & Bath Business - November/December 2020 - Cover3
Kitchen & Bath Business - November/December 2020 - Cover4
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