Gross sales leads and mission requests are sturdy, and income forecasts are bullish, however revenue margins are reportedly being squeezed, COVID-19 stays a priority, and kitchen/tub sellers and designers proceed to face provide chain snafus, product value hikes, a talented labor scarcity, and different headwinds to extra sturdy development within the months forward.
That’s the first consensus of a collection of surveys carried out by Kitchen & Bathtub Design Information and different trade sources trying to get a deal with on 2022 enterprise prospects, following a yr during which the kitchen/tub market witnessed sharp development in each its reworking and new-construction sectors, whereas COVID-19 continued to reshape the nation’s housing panorama, incomes and saving accounts rose, design traits and house owner demographics developed, and bigger, extra multi-functional houses continued to stay a spotlight of client spending.
However the tempo of market development, whereas projected to be palpable, has tapered off in latest months, and is anticipated to chill much more within the months forward, as inflation scythes by means of the economic system, product and labor availability proceed to hamstring design/reworking companies, housing affordability stays at traditionally low ranges, and uncertainties tied to the coronavirus proceed to loom.
Based on the Nationwide Kitchen & Bathtub Affiliation, surveyed members are projecting an approximate 9% income development in 2022, after a development charge of greater than 18% yielded a document income of $167 billion in 2021. On the similar time, although, many corporations within the residential building and reworking sectors are reporting regular will increase in mission backlogs, together with struggles to meet up with heightened demand, as they navigate provide chain challenges, greater prices for uncooked supplies, and labor availability points, in keeping with the most recent Houzz Renovation Barometer.
KBDN’s nationwide survey of sellers and designers, carried out on the tail finish of 2021, mirrors these findings.
Particularly, an amazing majority (86+%) of these surveyed by KBDN stated they anticipate their firm’s income to both enhance or stay roughly the identical in 2022 in comparison with 2021. In distinction, lower than 14% stated they anticipate a income decline in 2022 (see Determine 1). Income positive aspects are anticipated for each new and transformed kitchens and baths, though sellers and designers are extra bullish about income development from kitchens (34.2%) than they’re from baths (7.9%).
Sellers and designers additionally report that gross sales leads and mission requests are up dramatically in comparison with the identical time a yr in the past – comprehensible given how the present confluence of COVID-related demand, financial savings development, dwelling appreciation, authorities stimulus and different elements proceed to spur house owner spending. Particularly, a whopping 65+% of survey contributors report their present gross sales leads are both considerably or a lot greater now in comparison with a yr in the past, whereas solely about 15% report that gross sales leads are decrease and about 19% say they’re about the identical (see Determine 2).
However whereas gross sales leads are sturdy, and income is mostly anticipated to extend, surveyed sellers and designers paint a special image in terms of anticipated revenue margins. For instance, whereas 33.6% of these surveyed anticipate 2022 revenue margins to extend, 14.2% anticipate margins to say no in comparison with 2021, and greater than half (52.2%) anticipate margins to stay the identical (see Determine 3).
Different survey findings embrace:
With the COVID-driven emphasis on well being and wellness, work-at-home preparations and households sheltering in place, will increase in shopper requests are being reported for merchandise that vary from common design, good home equipment and aging-in-place parts to outside kitchens, anti- microbial supplies and residential air flow (see Determine 4).
Pricing is outwardly not a significant factor for shoppers, lots of whom appear keen to spend no matter it takes to get the kitchens and bogs that they need. As an example, whereas roughly 60% of the sellers and designers surveyed by KBDN say that pricing is both much less vital to shoppers or about the identical because it was a yr in the past, far much less (40%) say that pricing is extra important to shoppers now.
Whereas 51% of the design professionals surveyed say they’re both extraordinarily, very or considerably involved about COVID-19 negatively impacting their enterprise operations and income in 2022, greater than half (54%) say they’re “not very” or “under no circumstances” involved, even in mild of the brand new Omicron variant impacting the nation.
Whereas lower than 5% of survey respondents report shoppers suspending or canceling initiatives, almost 44% report they’re experiencing longer lead instances for product deliveries and/or manufacturing and delivery delays (see Determine 5). ▪