KBB Industry Performance in 2024 – What can we expect?

Yesterday at the British Institute of Kitchen, Bedroom and Bathroom Installation (BiKBBI) Annual Conference 2024, industry experts and keynote speakers discussed KBB industry performance and the outlook for 2024.

During the ‘Under the microscrope: How is the industry performing and what can we expect from 2024’ session, Abdul Tantouch took centre stage. Abdul is our Head of Content at AMA Research, a Barbour ABI company. Equipped with his findings, his aim was to showcase the UK’s economic outlook for the construction industry with a focus on the home improvement sector.

Abdul kicked off his session by presenting the audience an overview of the construction industry in recent years. He highlighted the notable growth of 16.1% in 2022 and discussed the decade-high peak in construction company insolvencies. Factors that have contributed to the transformation of the home improvement market.

Factors Driving the Home Improvement Market

Abdul revealed that there are a multitude of factors that drive the home improvement market and highlighted six in particular to focus on throughout 2024:

• Economic factors
• Household and personal characteristics
• Location characteristics
• Moving home
• Planning regulations
• Energy efficiency

Economic Factors

Economic factors are pivotal in home improvement trends. In buoyant economic times, consumers display confidence and invest in their homes. However, when the economy tightens, so do the purse strings. When home improvement projects are often postponed, it mirrors trends seen in other discretionary spending; meaning that if we see a downturn in home improvement work, we can probably expect tough times across the wider industry to follow suit.

Household and Personal Characteristics

Home improvement decisions are anchored in several key household factors. The financial means of a household significantly dictate the scale and scope of improvements they can afford. Typically, wealthier families invest more heavily in their homes. For older generations, specifically baby boomers, the increased value of their homes over time becomes a resource for funding improvements. The 30 to 60 age demographic often leads spending in this area, aligning with life stage needs. Yet, these spending patterns are fluid, adapting to shifts in economic conditions and evolving consumer preferences.

Location Characteristics

Different settings present unique drivers for home improvement. Interestingly, while most private homes are in urban areas, rural homes see a disproportionately higher rate of improvements. This could be attributed to the types of housing available, and the challenges associated with expanding urban homes.

Interestingly, Abdul pointed out whilst there is significant disparities across regions, the gap between the top and bottom districts is narrowing, suggesting that perhaps some “levelling up” in less affluent areas of the country may be occurring.

Moving Home

When it comes to moving home, there’s a recognised correlation with home improvement spending. In areas where house prices have seen rapid inflation, the trend leans towards improving rather than moving. This is especially true for those wishing to stay in the same area but needing more space, suggesting that in these scenarios, the investment in improvements can be more cost-effective than relocating.

Planning Regulations

Planning regulations play a crucial role in shaping home improvement activities. Restrictions in special areas, such as conservation zones or national parks, can reduce the tendency of households to seek permission for home enhancements. Conversely, changes to permitted development rights may lead to an uptick in improvements carried out without formal permissions.

Interestingly, the approval rates for applications vary significantly by local authority, with a notable relationship between the level of approvals and local house prices. High-price areas, for instance, often see a lower rate of approval for home improvement projects.

Energy Efficiency

Energy efficiency is becoming increasingly important in the home improvement sector. The UK’s older housing stock often lacks modern energy-saving measures, but with energy costs on the rise and new minimum standards being implemented, there’s a strong push for making homes more efficient. We’re seeing substantial growth in this area, with a significant uptick in domestic solar installations over the past two years.

KBB Installer Market Influence

After presenting the AMA Research data, Abdul handed over to a panel made up of Damian Walters BiKBBI CEO, Jane Blakeborough, Research Manager from the Bathroom Manufacturers Association (BMA), and Andrew Davies, Managing Director from Taylist Media.

Using AMA Research’s findings as a starting point, the panel had an insightful discussion on how this directly affects the KBB industry. Powered by the strong push for energy efficiency, Andrew and Damian revealed that the renewable energy sector can be seen as a threat to KBB, both from a consumer spending position and in terms of attracting workers, as the government has been heavily promoting and incentivising consumers to become more energy efficient. But will this trigger installers to move industry?

A shocking statistic, from the Retailer Survey 2024 by kbbreview, uncovered that around 66% of installers would consider leaving KBB for another industry. Andrew explored the idea that moving industry would not necessarily equate more money for the installer. So the question stands, what’s the driving force behind this?

Jane Blakeborough shared that the BMA recently conducted a survey sent to hundreds of homeowners. The question: ‘Who had the greatest influence on the purchasing of a bathroom?’. Around 40% of respondents answered: ‘bathroom installer’ – Thus highlighting the sheer influence the industry has on the consumer.

The theme of the conference was driving change through collaboration. As this session and others throughout the day highlighted, to drive the change required to see a successful 2024 and beat the challenge of the ageing workforce in KBB installation, a collaborative approach is needed much sooner rather than later.

Many of Abdul’s insights were taken from the Barbour ABI Home Improvement Report 2023 – download the report here. Or browse the full suite of AMA Research Bathroom and Kitchen reports here.