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Economy clouds cabinet projections.

ECONOMY CLOUDS CABINET PROJECTIONS

Total unit demand for kitchen cabinets and bath vanities is projected to crack the 50 million unit mark for the first time in 1992, according to figures released by the Kitchen Cabinet Manufacturers Assn./F.W. Dodge. Total cabinet demand has slid in the last two years since peaking at 48 million in 1989.

F.W. Dodge is projecting that 44.5 million units of kitchen cabinets and 5.6 million bath vanities will be ordered in 1992. This is up from an estimated 1991 total of 46.0 million and the first upward trend since 1989.

As it has for the past five years, the number of kitchen cabinets sold for use in a remodeled home, vs. a new home, continues to grow. Since 1986, when remodeling was at 16.5 million units, this portion of the industry has grown steadily to an estimated 27.1 million units in 1991. Units for 1992 are expected to marginally grow to 27.4 million.

Gary Lautzenhiser, senior vice president sales and marketing for Aristokraft, Jasper, Ind., said even the remodeling area is going to be affected as a result of the down economy. "There are not a lot of homes being sold and people are not moving up or around," he said. "Without that movement not as much remodeling is going to occur."

According to the figures, cabinets to be used in new housing will increase dramatically - growing for the first time since 1984-1985. In 1985, 20.2 million units were sold for new housing. Over the next six years these shipments would steadily fall to 13.8 million. Now, in 1992 F.W. Dodge is projecting a boom in this area to 17.1 million units.

While these figures look positive from one perspective, scratch the surface and the picture may not look as rosy. Richard Titus, executive vice president of the KCMA, said 1991 was a rough year and the ride is not over yet.

"The recession has been formally declared over, but some of the positive impacts (of being out of the recession) have been slow to reach us," said Titus.

Lautzenhiser said the industry will be hurt by low housing starts even though interest rates are low. He added he sees a market for low-end housing for the large population of young couples, blue collar workers and others at the lower end of the wage scale.

While F.W. Dodge estimates that approximately 4 million units of kitchen cabinets will be going to new homes, the National Association of Home Builders shows that on a seasonally adjusted annual rate fewer houses have been built from January through July, 1991 than in the same period a year ago.

Looking at total new housing starts in the United States from 1989 to 1990 reveals a drop from 1,376,000 to 1,193,000. The 1990 figure is the lowest it has been since the recession-plagued year of 1982 when new housing had dropped to 1,062,000, according to NAHB figures.

The drop off in new housing starts was felt across the nation but especially in the northeast, south and west. The northeast fell from 178,000 to 131,000, the south from 536,000 to 479,000 and the west from 396,000 to 329,000. The Midwest had the slightest decline from 266,000 to 253,000 new starts.

PHOTO : Despite these record setting projections, the KCMA is expressing caution.
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:kitchen and bathroom cabinet manufacturing
Author:Adams, Larry
Publication:Wood & Wood Products
Article Type:Industry Overview
Date:Nov 1, 1991
Words:578
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