Kitchen & Bath Business/KBISJanuary/February 2023 - 26

INDUS TR Y
OUTL OOK
STEADYAS WE GO
A bumpy ride this year will lead to the ultimate recovery in 2024
ED BRADY,
President and CEO
of the Home Builders
Institute
BILL DARCY,
CEO of the National
Kitchen & Bath
Association
ROBERT DIETZ,
Senior Vice President &
Chief Economist of the
National Association of
Home Builders
CHRIS EGNER,
President of the National
Association of the
Remodeling Industry
MANUEL GUTIERREZ,
Consulting Economist
for the National Kitchen
& Bath Association
TONI WYRE,
National Board of
Directors Chair for the
American Society of
Interior Designers
" As a result of
a slowdown in
consumer demand for
K&B products in late
2022, inventory levels
have increased and
supply chain problems
have eased, in effect
allowing the industry
to reset and return to
more balanced supply
and demand levels. "
- DARCY, NKBA
It's likely our industry will see a downturn
in 2023 before the silver lining predicted for
2024. Preliminary data from the National
Kitchen & Bath Industry's 2023 Kitchen &
Bath Market Outlook predicts that total residential
kitchen and bath spending is likely to
decrease approximately 14% in 2023. Th e forecast
is driven by a 17% decrease in construction
spending and a 10% decrease in remodeling
expenditures.
Despite the somewhat gloomy projection, the
remodeling industry is still staying afl oat. Aging
housing stock, demand for living-in-place improvements
and the use of homes for multiple
purposes, i.e., remote working, all fuel the desire
for renovations. According to Robert Dietz,
senior vice president & chief economist of the
National Association of Home Builders, this
desire has somewhat weakened because a lot of
remodeling occurs just after a home goes on the
market or right after it has been purchased.
Lately, existing home sales have declined because
of rising interest rates. Although those,
increased labor and material costs and longer
lead times all point to a downturn in remodeling,
some are still busy with project backlogs. Chris
Egner, president of the National Association
26
/ JANUARY-FEBRUARY 2023
of the Remodeling Industry, says his company
has had some slowdowns in new leads but not
to a great extent and that the pipeline looks good
through 2023. According to Manuel Gutierrez,
consulting economist for the NKBA, the home
remodeling market will expand to almost $450
billion in 2023.
For new construction, there have been 12
straight months of decline on the NAHB's Wells
Fargo Housing Market index. Single-family
starts are down 7%, and Dietz says the fi nal decline
of 2022 will be more than 10%.
" 2022 will be the first since 2011 in which
the calendar year total of single-family starts
decreased, " he added. " Th e Housing Market Index
is at 31, which is the lowest reading since the
Great Recession, and we will see an additional decline
in 2023. Th e index is signaling single-family
starts declines for 2023. "
Th ere are some subsectors of the industry that
will see growth this year, including custom home
building - larger homes built on owners' lots -
and single-family, built-for-rent construction.
Dietz says the multifamily rental market will decline
in 2023 after a strong 2022 and that there
are more apartments under construction than any
time since 1974.
Kitchen & Bath Business/KBISJanuary/February 2023

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