Industry Pros Report Flat Revenue, Muted Consumer Demand in NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) Report
By NKBA Editorial Staff
While the kitchen and bath industry had been poised for a modest rebound in 2025, industry professionals are revising and slightly tempering their projection for growth this year, according to key findings in the NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) report.
The Kitchen & Bath Market Index (KBMI) dipped to 55.1 in Q1 2025 from 59.7 in Q4 2024 as consumer demand for kitchen and bath products weakened amid concerns about economic uncertainty and the impact of new tariffs and other policy shifts. Kitchen and bath firms in three of the four segments surveyed downgraded their ratings, reversing the upward trend previously seen across all segments last quarter.
K&B industry revenue growth was flat at +0.2% year over year (YOY) in Q1 2025, reversing the trend from Q4 2024 when sales rose. Industry pros say they expect this trend to continue: in Q1 2025, K&B firms’ 2025 revenue growth expectation averaged +3.1%, down from +3.7% in Q4 2024. However, if, as expected, prices rise by a similar or higher amount this year, flat or even negative unit sales volumes could become a reality.
The Kitchen & Bath Market Index Survey, which is the basis for the KBMI findings, is conducted jointly by the NKBA and John Burns Research and Consulting. The Q1 2025 report is based on findings from 734 members of the NKBA community across four primary industry segments: design; building and remodeling; retail sales; and manufacturing.
Here are some additional insights about the uncertain start to 2025 and the industry’s latest outlook for 2025:
A Significant Rise in Input Costs
K&B retail and distribution firms report that their suppliers raised prices by +5.2% YOY in Q1 2025, reversing previous progress on kitchen and bath product inflation. Markups in Q1 2025 were highest (+7% YOY) for appliances, which have heavy exposure to countries impacted by recent tariff policy shifts.
Many firms had no choice but to raise prices in response. Kitchen and bath builder and remodeler pricing grew to +5.2% on average in Q1 2025. Lead times in Q1 are extending for key products, including cabinets, vanities and major appliances.
Tariff Policy Uncertainty Looms Large
K&B professionals now rate trade issues as their number one concern impacting the industry. Retail segment firms are already reporting an uptick in product costs. The industry expects supply chain disruptions to increase and pricing to continue to drift upward as tariffs reshuffle the international trade balance.
Consumer behavior is being impacted by uncertainty around changing tariff policies. Two-thirds of K&B firms (68%) reported that consumers either held steady on product quality or downgraded to lower-grade products in Q1 2025, reflecting caution in the planning of kitchen and bath renovations.
Insights into Adaptive Strategies
For the first time, the Q1 2025 KBMI report includes insights from K&B firms about how they are coping with their greatest industry concerns, specifically regarding the cost of materials, trade issues and fear of a recession. Their strategies range from seeking out alternative products and suppliers to lowering their profit margins.
“There’s no doubt that uncertainty around tariff policies and other macroeconomic factors is heavily influencing the K&B industry’s more muted outlook for 2025, as well as consumer behavior,” said NKBA I KBIS Global President & CEO Bill Darcy. “As we wait for more answers to come into focus about the extent and longevity of these impacts, we know that our industry will continue to be resilient and find ways to meet these evolving challenges.”
Read more about what K&B industry pros are saying about the challenges and opportunities they see in the months ahead by downloading the NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) report here.
