Cabinet industry builds on home remodeling growth.

CABINET INDUSTRY BUILDS ON HOME REMODELING GROWTH

In 1986, for every five units of the combined 42.6 million cabinets and vanities that were sold, three went for new construction and two for remodeling and repair. Last year those ratios flip-flopped with three of five cabinet/vanity sales being generated by residential remodeling, according to estimates released by the Kitchen Cabinet Manufacturers Assn./F.W. Dodge.

Fortunately for cabinetmakers, remodeling has picked up at a time when the market for new homes has gone south. The U.S. housing market went from bad to worse last year as start-ups dropped to a nine-year low. Of the 10 biggest housing markets, only Detroit recorded an upsurge in housing starts in the fourth quarter of 1990, and that was by less than 1 percent.

According to the National Association of the Remodeling Industry, home remodeling expenditures more than doubled between 1983 and 1989, when they cracked the $100 billion mark. NARI projects residential remodeling to surpass $110 billion this year and to top $120 billion in 1993.

The remodeling and repair boom is a tell-tale sign of the advanced years of U.S. homes. As America's housing stock continues to age, the opportunities for replacement cabinet and vanity sales expands.

Still, the industry is strongest when it has both barrels blasting in tandem. Not since 1985 have new construction and remodeling both accounted for more cabinet/vanity sales than the previous year. Assuming the remodeling market stays hot, when the housing industry rebounds, the cabinet industry will once again be going great guns.

New hope for RTA cabinets

Closely tied to the remodeling boom is the rise of the home improvement market. At the National Home Center Show held March 24-26 in Chicago, a handful of exhibitors displayed new ready-to-assemble kitchen cabinet lines targeted at the do-it-yourself crowd.

Up to now, RTA cabinets have lagged far behind the sales growth of other RTA products, including wall units and home entertainment centers. Yet, the increasing size of the DIY market leads many manufacturers to believe that there is great growth potential for RTA cabinets.

Some of those interviewed at the Home Center Show expressed optimism that the agreement by the nation's largest home center chain, Home Depot, to carry RTA cabinets made by Mill's Pride of Waverly, Ohio, will help open up the market. Mill's Pride, which boasts a high-output, low-labor intensive panel processing line, has identified the home improvement market as a good match for its RTA offerings. It's safe to assume that other major cabinet companies are closely watching to see if Mill's Pride is right.

Case Systems turns on the power

Speaking of panel processing, this issue features an article by Design Editor Barbara Garet on Case Systems, a Midland, Mich.-based manufacturer of institutional furniture that recently installed a highly automated manufacturing system that offers both flexibility and high production. Barb's story begins on page 64.