Kitchen & Bath Design News is the industry's leading business, design and product resource for the kitchen and bath trade.
Issue link: http://kitchenbathdesign.epubxp.com/i/660670
Despite a tepid start to 2016, analysts are predicting gradual, steady housing growth in 2016. Among the key statistics and forecasts released in recent weeks by government agen- cies, research frms and industry-related trade associations were the following: HOUSING STARTS Despite a modest decline in nationwide housing starts to kick of 2016, the National Association of Home Builders expects to see "ongoing, gradual growth" in housing pro- duction this year, according to David Crowe, chief economist for the Washington, DC-based NAHB. "An improving economy, solid job creation and pent-up demand for housing should keep the market moving forward," said Crowe, adding that January's lower production numbers indicate that "builders are being cautious as they face some market uncertain- ties and supply side constraints." Both single- and multi-family housing production dropped in January, according to the latest available numbers. EXISTING-HOME SALES Despite the global economic slowdown, the U.S. housing sector "continues to recover and will likely help the nation's economy avoid a recession," the chief economist for the National Association of Realtors said last month. According to Lawrence Yun of the Washington, DC-based NAR, existing sales kicked of 2016 on solid footing, rising slightly to the strongest pace since July, 2015 (5.48 million). Sales are now 11% higher than a year ago, "the largest year-over-year gain since July 2013," the NAR noted. "The housing market has shown prom- ising resilience in recent months, [although] home prices are still rising too fast because of ongoing supply constraints," Yun said. CABINET & VANITY SALES Sales of kitchen cabinets and vanities, which posted solid gains in 2015, increased in January, 2016 compared to sales for the same month in 2015, the Kitchen Cabinet Manufacturers Association said last month. According to the Reston, VA-based KCMA, manufacturers participating in the association's "Trend of Business" survey reported that January sales of cabinets and vanities rose 4.1% over January of 2015. Sales of stock cabinets gained 6.5%, while semi-custom cabinet sales rose 0.6% and cus- tom cabinet sales increased 10.7%, the KCMA said (see graph, below). APPLIANCE SHIPMENTS Domestic shipments of major home appliances opened 2016 on a slightly negative note, al- though most key product categories performed well, according to the Association of Home Appliance Manufacturers. The Washington, DC-based AHAM reported last month that January 2016 appliance shipments totaled 4.49 million units, down 1.7% from the 4.87 million units shipped during the same month in 2015. Home laundry products were up 6.2%, while kitchen clean-up products posted a 4.2% gain, food preservation products rose 0.5% and cooking products were up 0.1%, AHAM said. Proving a drag on total shipments were home comfort products, which declined 22%. Home Improvement Expenditures Seen Gaining This Year CAMBRIDGE, MA — Expenditures for home im- provements should see "healthy gains" in 2016, according to the Leading Indicator of Remodeling Activity (LIRA) released last month by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that annual spending growth for home improvements will accelerate from 4.3% in the frst quarter of 2016 to 7.6% in the third quarter. By then, the level of annual spending in nominal terms is anticipated to surpass the previous peak set in 2006, Joint Center ofcials said. "2016 is looking to be a stronger year for home renovation compared to 2015, thanks to the continued recovery in the owner-occupied housing market," said Chris Herbert, manag- ing director of the Cambridge, MA-based Joint Center. "In most U.S. markets, rising house prices are bringing more homes to the market and increasing sales, a large driver of home improvement activity." "The remodeling market has steadily im- proved, with homeowners incorporating larger, more discretionary projects into their home-im- provement priorities," added research analyst Abbe Will. "The real test will be whether the industry can clear ongoing bottlenecks in labor availability and consumer fnancing concerns to fully meet this increased demand." Market Growth Viewed Gradual in 2016 Sales of kitchen cabinets and vanities – which have risen 9.2% and 8.5%, respectively, for 2014 and 2015 – have posted consecutive monthly gains for nearly four years, as refected in the graph noting year-over-year gains by month for 2015, as well as January 2016. Source: Kitchen Cabinet Manufacturers Association (KCMA) THE STEADY CLIMB IN SALES OF CABINETS & VANITIES % Year-Over-Year Growth, by Month January '15 February March April May June July August September October November December January '16 4.6% 7.1% 8.2% 4.0% 5.7% 9.2% 5.0% 6.5% 8.9% 5.7% 10.6% 14.8% 4.1% 8 Kitchen & Bath Design News • April 2016 BAROMETERS A LOOK AT KEY STATISTICS & TRENDS SHAPING THE INDUSTRY MARKET ANALYSIS