Kitchen & Bath Design News

APR 2019

Kitchen & Bath Design News is the industry's leading business, design and product resource for the kitchen and bath trade.

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RISING COSTS But while business remains strong, rising costs continue to present challenges for kitchen and bath and other industry professionals. Only 13% of interior designers expect to see improvements in labor availability this year, compared to 39% who expect it to worsen (see Graph 3), and only 5% expect to see improvements in labor costs, while 41% believe these costs will rise (see Graph 4). Similarly, far more architects and design-build firms be- lieve labor availability will get worse (33% and 47%, respective- ly) than get better (14% and 18%, respectively), and fewer than 10% of those polled expect to see improvements in labor costs. Among GCs/remodelers/builders, 17% expect labor avail- ability to improve compared to 46% who think it will worsen, while 13% expect labor costs to improve compared to 49% who expect these costs to rise. Rising material costs and decreased availability are also creating some challenges, with availability more of an issue for GCs/remodelers/builders (see Graph 5), with 45% of those polled citing availability as worsening, compared to fewer than 20% of interior designers, architects and design-build firms. However, rising material and product costs were cited as problematic across the board, with 60% of design-build firms, 57% of GCs/remodelers/builders, 56% of interior designers and 53% of architects citing worsening product/material costs (see Graph 6). When asked to list their biggest cost drivers overall, interior designers cited products/materials (55%), advertis- ing/marketing (41%), employee wages or benefits (35%) and subcontractors (35%). For architects, the biggest cost drivers among those polled were employee wages or benefits (51%), office equipment/software (42%), advertising/marketing (35%) and business insurance (33%), while for design/build firms, the line items driving up their costs the most were products/ materials (72%), subcontractors (58%) and employee wages or benefits (57%). For GCs, remodelers and builders, the biggest cost drivers were products/materials (78%), subcontractors (64%) and employee wages or benefits (48%). CHALLENGES When asked to cite their top challenges in 2018, managing consumer costs and expectations were commonly heard refrains. Among interior designers, managing consumer concerns about costs was the top concern (35%), followed closely by managing consumer expectations (34%) and a shortage of subcontractors (32%). Likewise, for architects, the top concerns were managing consumer expectations (39%) and managing consumer concerns about costs (38%), followed by increased cost of doing business (22%). Design-build firms noted their top challenges as increased cost of doing business (42%), shortage of subcontractors (38%) and difficulty hiring/ being understaffed (37%); while GCs/remodelers/builders named top concerns as increased cost of doing business and shortage of subcontractors (42% each), and difficulty hiring/ being understaffed (31%). ▪ 3 EXPECTED CHANGE IN LABOR AVAILABILITY FOR 2019 ■ IMPROVE ■ WORSEN 4 EXPECTED CHANGE IN LABOR COSTS FOR 2019 ■ IMPROVE ■ WORSEN 6 EXPECTED CHANGE IN PRODUCT/ MATERIALS COSTS FOR 2019 ■ IMPROVE ■ WORSEN 5 EXPECTED CHANGE IN PRODUCT/ MATERIALS AVAILABILITY FOR 2019 ■ IMPROVE ■ WORSEN Architects Interior Designers Design-Build Firms GCs/Remodelers/Builders Architects Interior Designers Design-Build Firms GCs/Remodelers/Builders Architects Interior Designers Design-Build Firms GCs/Remodelers/Builders Architects Interior Designers Design-Build Firms GCs/Remodelers/Builders Source: Houzz Source: Houzz Source: Houzz Source: Houzz 14% 6% 7% 10% 6% 10% 14% 57% 60% 56% 53% 14% 9% 13% 45% 19% 18% 15% 5% 8% 53% 49% 13% 42% 41% 13% 18% 47% 46% 17% 33% 39% " When asked to list their biggest cost drivers overall, designers cited products and materials (55%), advertising and marketing (41%), employee wages or benefits (35%) and subcontractor costs (35%)." 36 Kitchen & Bath Design News • April 2019 HOUZZ SURVEY

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