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78 | Kitchen & Bath Design News January 2015 Forecast 2015 practices and some institutions will opt for safer loans, including lending to small businesses. The banks are feeling a lot of reg- ulatory pressure to document every loan," Baker says. "For many banks, it just isn't worth it to open themselves up to additional scrutiny." Still, growth has been experienced in the past year, and it is expected in the remodeling sector again in 2015. "Most members in our network have repor ted about a n 11-13 percent gain on average in 2014 revenue, although the gains have been uneven around the country," adds Peterson. "And, most are pre- dicting about another 10-12 percent increase for 2015, which is obviously good news." That means kitchen and bath de- signers need to be in high gear. One "undeniable trend," remarks Stapper fenne, is t he cont inued growth of digital tools. She notes that Web sites, blogs and social media will increasingly have to be part of the marketing mix for kitchen and bath industry professionals going forward. "More and more consumers are re- searching options online, so it makes sense to have a consumer-friendly Web site, even if your main client base is trade," she states. "Because they're doing their homework online, clients are having more infuence than they used to in terms of purchase decisions made by tradespeople. Designers used to present options for fxtures and fnishes, but now the clients are coming in with some clear ideas of what they're interested in." The National Association of the Remodeling Industry's third-quarter data, the most recent available fg- ures, also confirm strong growth over the last quarter. The report indicated that this was the second quarter of growth in 2014, following June's strong increase. The data ranks specifcs elements of the remodeling industry market and reported quarter-to-quarter improvement in current business conditions, number of inquiries, re- quests for bids, conversions of bids and the sales value of jobs. Economic growth saw a 10 per- cent increase in the third quarter, rising to 57 percent – up from June's rating of 47 percent. "This is indicative of the slow, steady recovery of the remodeling industry," says Tom O'Grady, CR, CK BR, a nd cha irma n of NA R I's St rateg ic Pla n n i ng Com m it tee. "Currently, 67 percent of remodelers are seeing growth and are confdent that the market is improving, which is in line with market indicators." The survey also explored home- owner fnancing of projects and a common theme echoed. Financing fell between "neutral to difcult" in terms of obtaining the funds. The biggest barrier to fnancing, at 38 percent, was the fnancing company being overly cautious, followed by the project being too expensive relative to the home's value, at 27 percent. Poor credit history was only se- lected as an issue by 11 percent of those polled. If cash or a check were not used, a bank or credit union was the main source for fnancing at 72 percent. Credit cards, the number two choice, were used only 20 percent of the time, the survey showed. While consumers remain cautious about mak- ing large expenditures, the steadily improving economy has been driving greater interest in kitchens and baths, and dealers and designers expect 2015 to show continued sales increases. That's according to kitchen and bath dealers and designers recently interviewed by Kitchen & Bath Design News , who project moderate sales increases for 2015, even while stressing challenges ahead that range from new tech- nology to stafng to the impact of potential terrorist activity on the economy. "I do expect 2015 to be busier than 2014," states John C. Schroeder of the Medway, MA-based Village Cabinet Design, LLC. "There is pent-up demand for housing, so the condo developments are coming back online. I am also seeing increased activity with empty nest- ers staying put and remodeling. The Internet remains both the biggest potential resource for advertising and the biggest challenge, keeping up with the rapidly changing search algorithms and formats." Theresa M. Sterbis of the Fremont, CA- based Project Partners Design agrees: "2014 was a good year for our frm, so my expecta- tion for 2015 is more of the same. Projects have included both remodels and new construction, and I expect to continue to see a nice mix of opportunities going forward." According to Carolyn Kelly of the Colorado Springs, CO-based Lumber Specialties, "My business has experienced steady growth this year, mainly in the remodeling area. I expect that area to remain constant, as people are still reluctant to buy new and have larger mortgages. I am still seeing remodeling for multigenerational needs as well. My biggest challenge is staying up with technology that is ever changing, and having enough time to ser- vice my customers through this technology." Israel Lieber, owner and head designer at Dynamic Cabinetry & Design, Inc., in Cedarhurst, NY concurs that technology continues to pres- ent some of the biggest challenges. He states, "We have seen a steady climb in business over the last few years and expect 2015 to continue on that upward trend. The biggest challenge is keeping up with all of the advances on the technological side of the business. It's easy to implement elements you know in your sleep, but specs are changing, methods are changing, products are changing; we have to stay on top of it or get left in the dust." At the same time, he cites more transitional and modern design as his frm's biggest growth area, which he notes is "no longer a trend, but now a real sign of our times." Jackie Balint, CKD, The Kitchen Collection in Redondo Beach, CA feels she already has a good jump on 2015 due to increased trafc in the latter part of 2014, explaining, "The second half of 2014 has seen a huge increase in serious business. Much of the new business we've [recently seen] will actually not begin until 2015. If everything continues at this pace, 2015 should be a great year for our business." Of course, not everyone is as confdent in what 2015 will bring business-wise, and many interject a note of caution in their projections. As Peggy Farrar of the Chester, VA-based Kitchen and Bath Designs of Virginia warns, "I think it has a lot to do with whether or not we get involved in a war with ISIS or new po- litical policies that will cause the interest rate to grow. If things stay the way they are right now, then yes, I think there is a lot of opportu- nity for business growth in 2015." And Maggie Mangano of the Basking Ridge, NJ-based MAM Designs Corp. is not convinced that 2015 is going to be a banner year for the kitchen and bath industry, explain- ing, "Clients are addressing projects, but their budgets are unrealistically tight." Rosalie Wyman, Wyman Design Concepts in Lebanon, NH is also uncertain whether 2015 will live up to the promise of the eco- nomic pundits, stating, "Business has been fat against the same period last year. Online shopping causes us to squeeze our margins on hardware, appliances and plumbing." Sales increases, too, can lead to new costs, warns Jennifer Hackbarth, of CH Construc- tion Services, Inc., in Port Charlotte, FL, who says, "I do expect sales to increase. But the cost of updating the showroom and adding new products when sales are not necessarily guaranteed concerns me." Several dealers and designers cited growth of cabinet sales as a promising trend, along with growing interest in kitchen remodels, compared to previous years where less proft- able bath jobs were more in vogue. DEALERS, DESIGNERS OPTIMISTIC FOR 2015