After struggling through some of the worst economic years on record, things are finally looking up. That’s the consensus of kitchen and bath dealers, designers and manufacturers, who say the economic clouds are finally lifting a bit, with 2013 showing real promise for the kitchen and bath industry.
In fact, according to a recent Kitchen & Bath Design News survey of kitchen and bath dealers and designers, 69.8% believe sales will increase in 2013, in contrast to only 3.1% who see it decreasing – a show of optimism that hasn’t been seen since the economic decline began several years ago (see Graph 1).
Steve Regele, v.p. of sales and marketing for Blum, Inc. in Stanley, NC notes that the improvements in housing starts are helping to fuel the positive news, “and at the same time, remodeling continues to increase,” he reports.
David Krakoff, senior v.p. – Americas, Sales Division – TOTO USA in Morrow, GA, comments that the housing industry recovery is accelerating, and construction is on the rise – up 42% year over year in October, according to the Trulia Housing Barometer as reported in Forbes magazine. Existing-home sales continue to show gains, and foreclosure rates have dropped to a post-economic-crisis low. The barometer notes that the combined delinquency and foreclosure rate is at its lowest level in four years.
Steve Bissell, marketing v.p., Kohler in Kohler, WI, notes that quarterly earnings reports for Wall Street show that banks are “getting back to making money the traditional way, through mortgages and traditional loans, so money is circulating back into the economy.”
In addition, the National Association of the Remodeling Industry reported that the remodeling industry doubled its growth in 2012.
“We believe that trend will continue in 2013, and homeowners will begin remodeling projects they may have previously put on hold,” states Ann Rottinghaus, marketing communication director, Elkay in Oak Brook, IL.
The state of the economy and the housing crisis has led to the pent-up demand that everyone has been waiting for, industry insiders believe.
That pent-up demand is “fueling a slow and steady growth in the remodeling segment,” says Tim Maicher, director of marketing for Blanco in Lumberton, NJ. He believes that, as long as consumers remain positive and confident, the upward trend should continue into 2013.
And Kevin McJoynt, v.p./marketing for Danze, Inc. and Gerber Plumbing Fixtures in Woodridge, IL believes consumer confidence is experiencing a nice rebound in recent months. “People feel their jobs are a bit more stable, home values are stable or rising, etc.,” he comments. “Thanks to continued low interest rates, new buys will continue to emerge and new construction should keep growing,” he adds.
Consumers’ perceptions of their home values is key, states Sam Straub, v.p., Trade Segment Development, Delta Faucet Co. in Indianapolis, IN. “After the declines of the last few years, the value of homes rose in 2012, and that has good momentum going into 2013,” he notes. “People are willing to invest in their homes if they feel the investment will help them in the long-term.”
There is still a great deal of caution, however, and Russ Wheeler, president of Alpharetta, GA-based Hansgrohe North America, believes 2013 will continue to be challenging economically speaking, as there are still “governmental challenges, economic headwinds and challenges in Europe.”
Kitchen and bath dealers and designers agree: While there’s a prevailing sense of optimism, according to KBDN’s survey results, dealers and designers still view price-sensitive consumers and the struggling economy as their top two challenges for 2013 (see Graph 2). Dealing with more savvy and demanding clients followed closely behind, as did issues with profit margins.