Cautious Optimism
The cabinet industry has had its highs and lows so far in 2023, with cautious optimism towards the future.
Kitchen Cabinet Manufacturers Association’s (KCMA) latest Trend of Business Survey indicates that custom and semi-custom cabinet sales have increased by 22.3% and 13.2%, respectively, while stock sales have decreased by 25.6%. Overall, the estimated market sales for January were $1.4 billion with a projected cabinet quantity of 3.5 million. The report includes monthly sales figures from stock, semi-custom, and custom companies, which together represent approximately 75% of the U.S. kitchen cabinet and bath vanity market.
The National Kitchen & Bath Association’s (NKBA) Kitchen & Bath Market Outlook Report forecasts gains in the remodeling sector, despite challenges such as supply chain issues and limited material availability. While medium-scale remodels are predicted to decline by 18% in 2023, single-family rentals will account for 13% of all kitchen and bath remodeling spending – $8.5 billion out of $66.7 billion – in 2023.
Sales in the cabinetry and home storage segment for the largest wood products producers in North America reached an estimated $15.8 billion in 2022, according to the FDMC 300 annual ranking. Projections for 2023 sales are expected to be similar, with some companies anticipating a shift in sales mix to more retail and renovator sales in lieu of new home construction sales. Corey Laurysen, VP of Sales & Service at Laurysen Kitchens Ltd., noted that the company is building a new manufacturing facility that will increase overall capacity, leading to an anticipated excellent year in 2024. However, due to current economic conditions, John Gahm, President of Kitchen Kompact, expects 2023 sales to be challenging and potentially flat for 2024 if the softening continues.
Challenges
Additionally, the cabinet industry is currently facing numerous challenges, including the slowdown in new construction, a tough labor situation, material availability, rising prices, and competition from low-cost imports. John Gahm believes that the current economic headwinds are a big concern for most manufacturers as well as the tough labor situation. Imported cabinets are also making their way into the domestic market, with some coming in illegally through transshipment and evasion from China. Meanwhile, Corey Laurysen highlighted interest rates as their biggest concern for 2023 and 2024, along with the cost of living and the rising labor rates. Laurysen believes it is a need for the industry to be more active in local colleges and trade schools to nurture the next generation and steer them towards wood manufacturing as a career. https://www.woodworkingnetwork.com/management/fdmc-300/cabinet-industry-cautious-outlook-2023-and-beyond