What’s in Store for the Remodeling Sector This Year?

By Caroline Broderick

Photo: ungvar | stock.adobe.com

Research from the National Kitchen and Bath Association (NKBA) and Houzz predicts strong future remodeling activity for the remainder of 2021 as more homeowners embark on pricier and higher-quality projects.

Indexes all point toward a robust recovery from the beginning of the pandemic when industry expectations tumbled. As more Americans stayed indoors, their perceptions and needs of their homes shifted, resulting in many taking on DIY projects around the home.

Now, more homeowners are opting for professionally done home improvement projects as vaccine distribution continues.

remodeling sector

Photo: courtesy KIOXIN Architecture

The NKBA/John Burns Kitchen & Bath Market Index reached its highest level since its inception and claims the industry is “on fire.” Its index reached 79.8, up from last quarter’s score of 60. Anything more than 50 is considered positive, making sentiment in the first quarter of 2021 highly positive.

Results came from surveying 524 association members about design, building and construction, manufacturing, and retail sales, says the NKBA. Current conditions and health of the industry both posted high growth compared to the fourth quarter of 2020, according to the index.

Data from the first quarter of 2021 points toward a 13% increase in industry activity compared to 2020, according to the NKBA.

The health of the industry reached 8.2 out of 10, up from the previous quarter’s score of 7.1. Current conditions leaped 18 points to 78 from 59.8 at the end of 2020. Positive predictions for the industry can be attributed to more homeowners embarking on full-scale remodels, with one in three designers noting clients request higher quality and higher-priced products and finishes.

Expected business activity for the construction center, according to Houzz, falls just one point short of pre-pandemic levels. Houzz’s activity indicator for architectural and design services have surpassed pre-pandemic levels, though.

Expectations for construction dropped to 18 points during the second quarter of 2020 as questions about the pandemic floated and all non-essential business practices came to a halt. Results for quarter one of 2021 shows remodelers are significantly more positive about the future.

But whether those expectations will line up with realities is still to be determined. The recent business activity indicator index for construction lays out like a rollercoaster with deep drops and even higher increases. The first and second quarter of 2020 levels dropped to 48 and 49. Today, the recent business activity indicators rest at a healthy level of 73, which beats pre-pandemic levels, showing that remodeling construction activity today is at its healthiest since the third quarter of 2018.

Photo: courtesy Pamela Hope Designs

Recent business activity for architecture and interior design professionals beats out construction by a landslide. Recent business activity for architecture and design industries posted a record high of 75. Expected business activity posted a similar trend, reaching 74 in the second quarter of 2021.

Backlogs for construction and design are between eight and nine weeks—the highest both sectors have seen for quite some time. It proves that homeowners are finding greater confidence in spending funds on professional projects and allowing members from outside their households to enter their homes.

Though backlogs for both of these sectors are historically high, expected business activities for both are similar to pre-pandemic levels seen in 2018 and 2019.

Still, all industries are facing supply chain issues causing long lead times and pricier projects. Current data shows those issues are not holding many homeowners back.