Pushing Forward

For those who dare to look into the crystal ball to see what is ahead for the kitchen and bath industry in 2012, the answer is the same as it has been the past few years: one giant question mark.

When pressed, most kitchen and bath dealers, designers and manufacturers are cautiously optimistic about 2012.

In fact, in a recent KBDN survey, which polled some 250 kitchen and bath designers and dealers with regard to their expectations for 2012, more than 67% said they believe sales this year will be better than in 2011.

While no one can truly predict what will happen in the next 12 months, a number of factors are expected to influence the market.

Not surprisingly, respondents to the survey cited economic uncertainty as their number one concern going into 2012, with 91 percent calling it one of the major driving issues affecting business. Consumer demand for lower prices came in second with 85% of respondents ranking it in their top five concerns, followed by concerns about the impact of this year’s presidential election and political activity at 54%. Increased consumer knowledge and demands followed at 52%, and competition from online suppliers and big-box retailers each came in at 44%.

Economic drivers

Economic concerns encompass so many different elements – from depressed housing values to unemployment to the stock market. All play a major role in the choke hold on the building and remodeling sector, and there are conflicting views as to when that hold will loosen.

“The key issues that will affect growth in 2012 are unfortunately the same issues the industry faced in 2011,” reports Stephen Smith, v.p. of marketing for Amerock, a div. of Newell Rubbermaid in Atlanta, GA. “The economic recovery continues to be slow, and the housing market – particularly new housing starts – is expected to remain relatively flat.”

“All indications are that there will not be a significant improvement in home values in 2012, which means continued financing challenges for remodeling projects, and a continued lack of ‘churn’ in the housing market – suppressing remodeling projects,” agrees David Tyler, v.p. of marketing for Top Knobs in Hillsborough, NJ.

“With consumers still cautiousabout spending and new construction enduring the long road to recovery, there is no denying that our industry is fragile,” adds Michael Werner, president & CEO, Globe Union Group, Inc./Danze Inc. & Gerber Plumbing Fixtures in Woodridge, IL.

But Jim Scott, managing director for the Kitchen and Bath Industry Show notes that industry players who look at housing and economic trends see gradual improvement in both housing starts and remodeling, with remodeling showing a little more strength going into 2012. “So, I think we will begin to feel at least a calm in the housing market, if not a slight breeze at our backs,” he states.

Paul Sova, v.p. and COO of Showplace Wood Products in Harrisburg, SD believes consumer spending is on the upswing, however, and that consumer confidence will drive sales for both the remodeling sector and new home construction. “There are positive things happening in agriculture and American manufacturing that we have not seen in the last three years,” he offers. “Consumer spending is gaining momentum, and housing prices have now retracted to the point where more Americans can afford to buy or build.”

What should help the industry, according to Werner, is that the “driving factor is that homes are cheap, and now is a great time to buy,” he stresses. “With an abundance of foreclosures, vacant properties and older homes on the market, homeowners with purchasing power will put remodeling and renovating at the top of the ‘to do’ list.”

Ken Fey, COO for Houzer, Inc. in New Brunswick, NJ believes that remodeling is on the upswing “and will likely remain in that direction during and beyond 2012 due to the aging housing stock in need of reconditioning for sale.”