CHICAGO — Kitchen/bath design and remodeling firms are expressing guarded optimism about the prospects for a business uptick in 2025, although inflated product and material costs, lingering homeowner uncertainty, skilled-labor shortages and other market headwinds continue, as in 2024, to temper expectations.
According to a nationwide survey conducted by Kitchen & Bath Design News, dealers and designers, while forecasting 2025 revenue gains, report that they harbor nagging concerns about economic and geopolitical factors potentially stunting sales revenue and profit margins in the coming year (see Barometers and the related stories below).
KBDN’s online survey, which garnered roughly 250 responses, was conducted in December of 2024, at the tail end of a year characterized by stubbornly high interest rates, inflated product/material costs, a sluggish housing sector, presidential-election uncertainties and a bifurcated remodeling market characterized by robust activity in the luxury sector and pronounced softness in the market’s middle and lower end.
When asked about their prospects for 2025, more than 84% of those surveyed told KBDN that they’re either “somewhat,” “very,” or “extremely” concerned about anticipated economic conditions impacting their business. In contrast, only about 15% reported that they’re either “not very concerned” or “not at all concerned” (see Figure 1).
While many expressed satisfaction with the outcome of the recent presidential election, predicting that homeowners will be more comfortable spending in an improved economy, others shared concerns over the potential threat of tariffs on foreign goods, among other issues. Skilled-labor shortages, already problematic, will only worsen if the U.S. clamps down on immigration, some say.
Forecasts Varied
Those concerns are mirrored in 2025 revenue projections, which are evenly split among KBDN survey respondents. Indeed, while roughly 50% of those surveyed say they expect 2025 kitchen and bath revenue to post gains over last year, an equal percentage expect 2025 annual revenue to either remain flat or decline compared to 2024 (see Figure 2).
Moreover, when asked if anticipated revenue increases in 2025 would be at the same rate as in 2024, only about 46% of those surveyed answered affirmatively. By comparison, 54% of the survey’s respondents told KBDN that any revenue increase they might experience in 2025 would likely be at a slower pace than in 2024.
More positive expectations are being reported when it comes to profit margins – with roughly 39% of those surveyed reporting that they anticipate their company’s profit margins to increase in 2025, while only about 18% say they expect their margins to decline, and some 44% expect margins to remain about the same in 2025 as in fiscal 2024 (see Figure 3).
Prices for products and raw materials top the list of major challenges currently facing kitchen and bath design firms, survey respondents report. Other challenges include a significant recent turnover among independent and factory sales reps and customers postponing and/or canceling projects (see Figure 4).
“Prices have skyrocketed ever since COVID,” one business owner told KBDN. “Overhead costs are rising rapidly, impacting my ability to cost-effectively promote my business. I’m hoping to see costs level out or become lower in the new year.”
“Prices for everything have climbed to ridiculous levels, yet quality and support haven’t kept pace,” another survey respondent observed. “No one can forecast what the effect will be on our business. Interest rates and the cost of living will need (time) to filter back down before ‘real people’ are able to entertain upgrading or replacing failed systems in their homes.”
“The economy has taken some of the fun out of designing,” yet another business owner said. “The kitchen and bath industry has proven resilient throughout the years, but business will decline in the face of (continued) economic hardship. Only those consumers with very good financial standing will be able to afford major renovations, which will make competition in the market tougher than it already is.”
Another challenge, survey respondents told KBDN, is the ongoing shortage of skilled labor.
“The most critical supply-and-demand issue we face is (hiring and retaining) skilled kitchen designers,” one business owner said. “The skillset requires a strong aptitude for sales, excellent communication skills, strong visual skills, knowledge of design and construction principles and very strong computer/technical skills. Many of the ‘best’ go into business for themselves, because working for a studio is not very high paying at all.
“Without young people coming into the industry, it’s getting harder and harder to find designers.”
Other Findings
Among other key survey results were the following:
- Sales leads are currently pacing at a higher rate now than at the same time a year ago. According to the businesses polled by KBDN, 35.8% of survey respondents reported that sales leads are currently “somewhat higher” than they were a year ago, while 6% said they are “much higher.” In contrast, 22.8% of the poll’s respondents reported that sales leads are “somewhat lower,” while 15.5% said they are “much lower” and roughly 20% reported they are about the same.
- Project costs reportedly remain a critical issue for many kitchen and bath remodeling consumers, according to surveyed firms. Among those polled, nearly 55% say that project pricing is more important now than at the same time a year ago. In contrast, only about 6% say that pricing is less important, while 40% say it carries the same level of importance as it did the same time last year.
- Products that provide for ease of maintenance, along with natural products such as stone and wood, lead a long list of products that are currently in demand among kitchen and bath consumers. Among other leading in-demand products are universal design/aging-in-place elements, survey respondents report (see Figure 5).
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