The Kitchen & Bath Market Index (KBMI) remained flat year-over-year at 53 out of 100, signaling that ongoing consumer uncertainty and rising costs are slowing demand for residential renovations. The 2Q26 Kitchen and Bath Market Index (KBMI) Report, a joint effort between the NKBA and John Burns Research and Consulting, tracks these trends by surveying 500 NKBA members across design, building and remodeling, retail, and manufacturing sectors. The manufacturing sector was the only group to upgrade its rating by 1% this quarter, experiencing modest expansion, though it still downgraded its expected residential sales growth for the year by 5%. Despite these specific sector shifts, sentiment about the overall economic health of the industry has remained essentially unchanged over the past year.
Related: HIRI Insights Help Designers Meet Homeowner Needs
Revenue Expectations Drop Across the Board
K&B firms now expect -2% revenue growth in 2026, a significant downgrade from the +4% projection recorded in the previous quarter. This shift represents a widespread revision across all segments, with the retail sector projecting the best performance at +5% growth. While every segment downgraded its outlook from the first quarter, the manufacturing group is the exception, still forecasting modest, single-digit growth for the year. Price sensitivity is holding back spending, as more than a third of design firms report that consumers are shifting to lower price points. This is the highest share since this metric was first recorded in 2023, representing a 13% increase from the previous quarter. Firms have largely absorbed these challenges, with 40% of surveyed professionals stating they have passed tariff-related costs through to consumers.
Despite the challenges, the industry is seeing a glimmer of hope in the near term. Kitchen and bath firms reported higher expected sales for the upcoming quarter, scoring 65 out of 100 compared to 59 out of 100 during the same period last year. This is the highest value recorded for the second quarter in three years, potentially signaling an early indicator of improving conditions over the coming months. There is no doubt that macroeconomic factors are posing a range of challenges for consumers and K&B professionals alike. While expectations for this year have definitely been somewhat tempered, our research indicates that firms continue to hold steady as they make adjustments to take advantage of available opportunities.
Related: Will The Block Return Next Year Nine Weighs In
Costs and Trade Tensions Stall Progress
Consumer uncertainty remains the leading constraint to industry growth, cited by 49% of professionals, followed closely by rising building material costs at 42%. This concern over material expenses jumped significantly by 12% from the previous quarter. Nearly a third of respondents, 36%, identified tariffs and trade issues as a factor that will negatively impact growth over the next six months. The manufacturing segment’s downgrade in expected sales, despite a slight upgrade in its overall index rating, highlights the complex nature of these current market conditions. Firms are handling a setting where supply chain disruptions and tariff impacts are forcing a re-evaluation of pricing strategies and customer expectations.
