A Modest Rise in Project Backlogs Indicates Steady Incoming Demand
By NKBA Editorial Staff
The Kitchen & Bath Industry remains in a period of constrained growth, as its four key segments – design, building and remodeling, retail, and manufacturing – experienced uneven performance during the first quarter of the year that led to mixed outlooks about the months ahead.
According to the findings of the 1Q26 NKBA Kitchen & Bath Market Index report, building and remodeling was the only K&B industry segment to post year-over-year growth, which was supported by backlog strength. Design and retail activity remained softer, despite improving pipelines and expectations. Meanwhile, manufacturers reported slower demand and excess capacity, contributing to a particularly cautious outlook.
Design and retail were the only segments to report modest upticks in activity in 1Q26; they also reported slight increases in their assessment of their segment’s overall health.
Here are snapshots of the four key industry segments from the report:
Design firms experience decline in project completions, uptick in backlogs
While design firms expect +4% growth in 2026 following a difficult year in 2025, the year was off to a slow start – sales were down -1% YOY in 1Q26 and project completions declined for the fifth consecutive quarter. However, in a positive sign, project backlogs rose to 2.1 months in 1Q26, indicating stronger incoming leads and more signed jobs.
Higher prices keep retail foot traffic down
K&B retail foot traffic declined -1% YOY and -2% QOQ in 1Q26, continuing a long-term trend. Retailers reported that their pricing continued to be affected by tariff-related cost pressures from suppliers. While the 15-category average cost increase in 1Q26 was +6.3% YOY, that figure was down slightly from +6.8% in the previous quarter. Most retailers (53%) said they still had balanced/normal inventory, and retail pros expect +6% revenue growth in 2026 – the most positive sentiment of any segment.
Building & remodeling
Builders and remodelers reported that sales were up +2% YOY in 1Q26, though project completions were down slightly (-1.3%). Firms indicated that more consumers are shifting to higher price points and larger projects. Similar to the design segment, they reported a rise in project backlogs to 3.3 months. Building and remodeling companies expect +4.6% revenue growth in 2026, second only to the retail segment.
Manufacturing
Manufacturers reported stronger demand for luxury/premium products than for midrange and value-oriented products in 1Q26. Order growth declined (-2.6%) for the first time since 3Q24. More than a third (39%) of K&B manufacturers report excess capacity and more than a quarter said they have elevated inventories as sales conditions remain stagnant.
“While there are considerable headwinds facing all K&B industry segments, some are definitely faring better than others,” said Bill Darcy, Global President & CEO of NKBA I KBIS. “Despite these stubborn barriers to more significant growth, we continue to see indications of improvement ahead that should ultimately benefit the entire industry.”
For more insights, download the full 1Q26 Kitchen & Bath Market Index report here.
