K&B Industry Growth Remains Flat Amid Continued Consumer Uncertainty, According to Q2 2025 KBMI Report – NKBA

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K&B Industry Growth Remains Flat Amid Continued Consumer Uncertainty, According to Q2 2025 KBMI Report

Firms express greater optimism for 2026 — if economic stability and lower interest rates take hold
Image courtesy of Getty Images.

By NKBA Editorial Staff

The kitchen and bath industry remained in a period of muted growth last quarter – industry sales were essentially flat year-over-year — as consumers generally remain risk-averse in an environment of continued economic uncertainty. According to the NKBA / John Burns Q2 2025 Kitchen & Bath Market Index (KBMI) report, many consumers engaged in pre-buying due to expected tariff-related price increases, while other homeowners postponed projects due to questions about where the economy is headed.

The KBMI rated 53.2 out of 100 in Q2 2025, down from 55.1 in Q1 2025, reflecting slower current sales and lower expectations of near-term sales and industry health. Overall, the index indicates that the K&B industry is continuing to experience modestly expanding activity tempered by ongoing consumer uncertainty.

One key takeaway from the latest survey of 575 NKBA members across the design, building and remodeling, retail sales, and manufacturing segments is that remodeling is again expected to outperform new construction for K&B firms — not just in 2025, but through 2026.

Many kitchen and bath firms expressed confidence in a return to a growth trajectory next year, pending overall economic stability and lower interest rates. The biggest risk factor to this hopeful outlook is continued uncertainty around the impact of tariff policy.

Some additional key takeaways from the 2Q25 KBMI report: 

Design and Retail Sectors Downgrade Ratings 

The overall decrease in the KBMI can largely be attributed to downgrades by surveyed design (-5.8) and retail (-5.5) pros. These were the two industry areas that cited Q2 2025 decreases in the Current K&B Activity Index, which rates current quarter residential kitchen and bath sales compared to a year ago (Q2 2024). While, overall, kitchen and bath professionals expect sales conditions to improve over the next three months, their optimism has been tempered somewhat from the prior quarter, especially in the retail sales and manufacturing segments.

Consumers Staying Put, Modestly Remodeling

While design firm sales, impacted by a contraction in new home sales, hit a new post-Covid low (-5% YOY), Q2 2025 building and remodeling sales were up 3% YOY, signaling a stable, but slowly recovering demand for remodeling. More consumers are staying in their existing homes; middle-income consumers, in particular, are pursuing generally more modest renovations and budget “refreshes.”  

Risk from Rising Input Costs

K&B firms report average price inflation of +4.6% YOY, in line with average input cost growth in Q2 2025. Many firms – including more than half of manufacturing segment firms providing tile, appliances, faucets, and cabinets — say they are struggling to pass on costs and are feeling the squeeze on their margins. Several noted that higher pricing from tariffs won’t actually hit consumers until next year, which could dampen their outlook.

Brand Names Still Matter

For the first time, K&B firms were asked to share insights into the importance of branding for their clients. More than half said that brands are very important (41%) or extremely important (11%) to customers, likely attributable to greater social media and internet-driven brand awareness among consumers. Nearly a third (30%) reported that brand names have become more important to their clients this year.

“Our industry is not experiencing the significant growth we expected,” but it’s holding remarkably steady as we wait for key economic policy decisions to play out,” said Bill Darcy, Global President & CEO of NKBA | KBIS. “Tariffs, in particular, continue to be a major X-factor – the impacts of those policies, and how they will ultimately affect costs and consumer behavior, have not likely been fully felt.”

To access additional data and insights, download and read the complete report.