Bill Darcy, NKBA | KBIS Global President & CEO
As I’ve shared in recent weeks, we continue to pay close attention to ongoing changes in federal trade regulations and are actively monitoring how new tariff policies are impacting businesses in our sector. The newly-released 3Q25 NKBA/John Burns Kitchen & Bath Market Index (KBMI) Report provides some important, early insights.
What we heard from K&B pros in conducting this survey – and continue to hear – is that tariffs, along with continued consumer uncertainty, are slowing business growth and restricting opportunities. The KBMI rated 50 out of 100 in 3Q25, down from 53 in Q2, pointing to generally flat activity.
More than half (55%) of surveyed K&B firms cited tariffs/trade policies as their top constraint to growth over the next six months. The effects are being felt across the board, with increases in material and other costs, higher prices, and decreases in margins and consumer confidence. Higher building material costs (44%), a byproduct of rising tariffs, were cited as the third most impactful constraint to growth.
Suppliers raised product prices to K&B retailers by 6.1% YOY in 3Q25, up from 4.6% in 2Q25, with the steepest increases reported for lighting and vanities. Tariff cost concerns led K&B firms to increase prices they charge for products and services by 4.6% YOY on average during 3Q25.
Tariffs also impacted margins, which declined in the last quarter; more than two-thirds (83%) of firms told us they had flat or lower gross margins YOY. The strongest margin pressures were felt by the manufacturing and retail sectors. Seventy percent of respondents in the manufacturing sector said tariffs are putting pressure on margins, with most (54%) unable to fully pass on cost increases.
Changes to the importing and exporting of critical materials in residential remodeling is a significant issue felt by millions of households. NKBA is a global organization and we remain sensitive to the profound business challenges faced by many of our members in North America and throughout the world.
While our most recent data clearly shows that uncertainty and market volatility are top of mind for the majority of our sector, we are paying close attention to other related developments, including rising housing costs, to get in front of any impediments that may cause homeowners to postpone or pause their home remodeling projects.
Make no mistake: we remain focused on keeping our industry competitive, relevant, and thriving. That means staying front-footed with our advocacy colleagues in Washington, coordinating closely with our international partners, and harnessing the NKBA’s research and relationships to prepare our 35,000 members for what comes next.
We will continue to provide resources and share the most relevant insights on how tariffs and other macroeconomic factors are affecting our industry.
