This article was originally published by Kitchen & Bath Design News.
BETHLEHEM, PA – The kitchen and bath industry is facing “significant challenges” resulting from the impact of macroeconomic pressures tied to tariffs and continued consumer uncertainty, a new report from the National Kitchen & Bath Association finds.
The “difficult environment for growth” is reflected in the data featured in the 3Q25 NKBA/John Burns Kitchen & Bath Market Index (KBMI), a quarterly report produced by the Bethlehem, PA-based NKBA in conjunction with John Burns Research & Consulting. The KBMI rated 50 out of 100 in the third quarter of declining growth, and the lowest survey result since the second quarter of 2020. Overall, the KBMI indicates that kitchen and bath industry activity “is generally flat,” the report stated.
Higher building material costs, a byproduct of rising tariffs, were cited as the third most impactful constraint to growth after tariffs/trade issues and consumer uncertainty in the latest survey of 530 NKBA members across the design, building and remodeling, retail sales, and manufacturing segments. Nearly one-third of industry pros highlighted labor costs as a key impediment to growth.
Among additional insights:
- Overall, kitchen and bath industry sales declined 4% year-over-year according to the latest statistics. Recent price increases mean that sales volumes “were likely in even more negative territory.”
- Kitchen and bath project cancellations and postponements remained elevated, “indicating that many homeowners are generally cautious about embarking on major projects.”
- Tariff-related cost concerns compelled kitchen and bath firms to increase prices by 4.6% year-over-year on average during the third quarter. Margins are also down, with manufacturing and retail sales firms reporting the strongest pressure.
- The luxury market “is still a source of stability,” the KBMI found, noting that luxury/premium consumers, less sensitive to higher project costs, outperformed in the third quarter, while the value-oriented and mid-range consumer segments spent less.
- Despite all the factors working against growth, the industry outlook for 2026 still projects mid-single digit growth, averaging 4.5%. Manufacturing (6.1%) and design (5.8%) firms, in particular, remain optimistic about expected resilience in premium consumer spending, the report found.