Market Still Up As 1999 Begins
The market for kitchen and bath products - as well as new housing and residential remodeling in general - remains positive, and reflects the strong economy that exists in the U.S. as 1999 gets underway. According to recent results announced by government agencies and industry-related trade associations, a wide range of positive factors - from economic growth rates, unemployment and mortgage rates, to inflation, consumer confidence and demographic trends - continues to fuel industry growth. Among the industry's key statistical-related developments in recent weeks were the following:
Cabinet & Vanity Sales
Sales of kitchen cabinets and bathroom vanities posted another month of gains in October of 1998, rising 5.7% over October of 1997, according to the Kitchen Cabinet Manufactur-ers Association. The Reston, VA-based association said that manufacturer-members participating in the KCMA's monthly "Trend of Business Survey" reported that October's increase was led by a 9.2% increase in custom cabinet sales; stock cabinet sales for the month were up 5.1%, the KCMA said, adding that year-to-date sales through October were up 11.5% compared to the same 10-month period a year earlier.
Domestic shipments of major home appliances, led by gains in cooking products and refrigeration, were running substantially ahead of 1997 levels through the first 10 months of 1998, reported the Association of Home Appliance Manufacturers. According to the Chicago-based AHAM, year-to-date appliance shipments through October totaled some 47.6 million units, up 10.2% over appliance sales from January through October a year earlier. Cooking appliance shipments were up 12.3% in that same time span, while refrigerators were up 10.2%, kitchen cleanup equipment was up 6.9% and home laundry products rose 8.2%, AHAM said.
As of November, existing-home sales - buoyed by affordable mortgage rates and low unemployment - were expected to set a new annual record of 4.75 million in 1998, the National Association of Realtors reported. According to the Washington, DC-based NAR, resales were expected to continue "their robust pace" through the balance of 1998 - although, this year, "a slowing economy should slow the pace of resales toward a more sustainable rate." In a separate report, the Butler, NJ-based mortgage market analyst HSH Associates noted that the rate of existing-home sales through October - pegged at an annualized level of 4.79 million units - has made housing "the brightest star in the economy" for the past year or so. The housing market continues to shine," HSH Associates said in late November.
The single-family housing market "has benefitted from solid income growth, ample job opportunities and some of the lowest interest rates in decades," observed the National Association of Home Builders in a report issued last month. "These [factors] have caused affordability to rise to levels not seen in two decades." According to the Washington, DC-based NAHB, single-family housing starts rose to 1.246 million units in October of 1998, up 3% over a month earlier.
At the same time, the association's monthly survey of home builders - the Housing Market Index - jumped to a new high of 78 in November - the highest level in its 13-year history. The Index measures current sales levels, buyer traffic and future sales expectations among surveyed builders for new single-family homes.
Washington, DC -