KBzine: the original kitchen and bathroom industry e-news - since 2002
23rd June 2017
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With the Election results now in, the Kitchen, Bathroom, Bedroom Specialists Association's national chair Richard Hibbert has been considering the outlook for the sector. Richard says that while much of the focus of the election has been on investment in the NHS, education and social care, Brexit is clearly an issue that will affect businesses because of the terms of the deal and trading agreements and the impact the process will have on the economy.
He quotes a recent British Chamber of Commerce report which suggests that uncertainty over Brexit and the General Election has squeezed spending and reduced retailer margins - which in turn has slowed growth. Anecdotal evidence from KBSA retailers is mixed, however. Some are reporting that the market remains buoyant with average spends rising, albeit with quieter periods during holidays and in the lead-up to the election.
Others suggest that there has been a change this year and things are not quite as good as they were. Footfall remains good and order books are still full but consumers are more cautious and not spending as much. This could be down to uncertainty or simply mean that people have less disposable income.
Richard says typical KBSA customers are older, spending money on their 'empty nest' homes, but these couples are now having to use their money to help their children get on the property ladder, leaving less for them to invest in their own homes. The housing market will remain difficult for some time so this scenario is unlikely to change in the foreseeable future. Whilst these factors suggest that things may get tougher, the overall economy is in good shape. Manufacturing output has increased during the year by 0.5% mainly thanks to the drop in the value of Sterling.
Unemployment has been steadily falling and now sits at 4.8% compared to a figure of 8% just four years ago and interest rates are at their lowest levels for 50 years. At the same time life is becoming more expensive for the consumer with inflation hitting its highest level in four years, and wages dropping in real terms for the first time in three years.
Like Richard, I feel that with no crystal ball to fall back on, the only certainty we have is that the outlook will be uncertain for some time to come. I hope we as an industry can convince consumers that investment in their properties, in terms of new bathrooms, kitchens and bedrooms, will be always be money well spent.
9th June 2017