Trade Issues, Rising Material Costs, Skilled Labor Shortage are Most Cited in Q1 2025 Kitchen & Bath Market Index Report
By NKBA Editorial Staff
Shifts in federal international trade policies, especially changing tariff policies and the resulting increase in the cost of materials, topped kitchen and bath pros’ list of industry concerns in the Q1 2025 Kitchen & Bath Market Index Survey.
When asked to indicate how big of a concern several factors are to their company right now, the surveyed professionals cited these two challenges most prominently (8 on a 1-10 scale of least to greatest concern) — followed closely by cost inflation, recession fears and the shortage of available skilled labor — as they expressed more modest expectations for growth this year.
Given the industry’s history of resilience, it’s not surprising that many of the surveyed design professionals have developed strategies to mitigate the expected impact of these industry challenges – something they’re used to doing in the face of adversity.
Here are some further insights in the NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) report about the questions that are driving the industry’s more reserved outlook for 2025:
A Range of Uncertainties
While concerns over trade issues jumped dramatically between the last quarter of 2024 and Q1 2025, recession fears, worries over geopolitical tensions and supply chain concerns were also on the rise. The availability of skilled labor is proving to be a durable concern, especially as it impacts K&B companies’ ability to meet demand. Concerns over interest rates decreased modestly, likely due to widely held assumptions that rates are unlikely to change dramatically this year.
Cost of Materials, Possible Recession Top Designers’ Concerns
Most designers said that of all the factors that are of concern to their company, the foremost is the cost of materials (22%), followed closely by fear of a recession (21%). The availability and cost of skilled labor (15%) and trade issues, including tariffs (14%), were also cited by large numbers of respondents.
How Design Professionals are Adjusting
Design pros also shared how they’re working to proactively address their biggest worries.
For example, they are tackling rising materials costs by stepping up the pace of activities to get out in front of the impact — encouraging quick purchasing and ordering materials in advance, especially appliances. To address fears of a recession, they are lowering the markup for certain projects, diversifying project types to help fill up their pipelines and experimenting with fixed-fee design rates over typical hourly rates. And to meet the skilled labor shortage challenge, they’re working with contractors who have several sub-contractors and focusing on creating more positive communicative relationships with contractors.
“Kitchen and bath professionals have experience navigating significant headwinds by finding creative solutions that keep their businesses on solid footing,” said NKBA I KBIS Global President & CEO Bill Darcy. “In this moment of uncertainty, we’re again seeing companies put these solutions into practice until there is greater clarity about which challenges we will be contending with over the longer term.” Read more about what K&B industry pros are saying about the state of the industry and what lies ahead by downloading the NKBA / John Burns Q1 2025 Kitchen & Bath Market Index (KBMI) report here.
