The cabinet industry continues to heat up as industry experts predict another year of increased sales for 2003. This follows a year of double-digit growth in 2002, which many attribute to record sales in new housing units.

U.S. Commerce Department figures show new single-family home sales for 2002 reached 976,000 units, up 7.5 percent from the previous annual record of 908,000 units achieved in 2001. Accordingly, cabinet sales for 2002 increased by 10.8 percent over 2001, to $5.4 billion, as reported by the Kitchen Cabinet Manufacturers Assn.’s Trend of Business Survey.

This upward sales trend is continuing in 2003. The monthly survey shows January cabinet sales increased 8.2 percent over 2002 figures for the same period. According to the KCMA, the growth came from sales of semi-custom cabinetry, which rose 34.4 percent in January, while stock cabinet sales decreased 1.3 percent and custom sales declined 5.1 percent.

“We think our year here will be very positive,” says Gene Ponder, chairman and CEO of Republic Industries of Marshall, TX. “It will be at least as good as last year, if not better.”

Stanley Bandur, president of the Elkay Cabinet Group of Red Lion, PA, says that 2002 was a strong year for his company. Nevertheless, he notes, “We were cautious last year, and we are cautious this year.”

Angela O’Neill, director of marketing for Wellborn Cabinet Inc. of Ashland, AL, says the company’s outlook is “very good” for this year. “Our 2002 numbers were 11 percent over 2001. We have the same outlook as far as percentage growth for this year as well,” she says.

Remodeling Market a Strong Base
The majority of cabinets made have been destined for remodeling projects every year since the late 1980s. And, while the near-record pace of new home construction has doubtlessly provided a welcome boost, many manufacturers still target remodeling as the true growth market.

“There is a lot of aging housing around the country, such as houses from the 1970s and 1980s,” Ponder says. “People are taking advantage of low interest rates and taking a second loan to increase the sale value of their homes.”

Ponder notes that about 40% of Republic’s business currently involves remodeling, and that the company plans to increase that ratio to an even mix of remodeling and new construction.

“There will probably be even more gain in remodeling in the next couple of years because dealers are accepting even more remodeling business and are willing to take the work,” says O’Neill. She adds that the events of the past year and a half have driven people to invest more in their homes as well.

Regionally, Ponder says Republic has seen cabinet sales heat up this year in California, Florida, Georgia and the northeast. Bandur says that business on the East coast has been slow this year due to weather, although he predicts, “It’ll work itself out.”

O’Neill adds, “I think the potential for growth in remodeling is equal in all parts of the country. The increase in remodeling is really more national in scope.”

Factoring in Imports
Although the cabinet industry has not been hard hit by imports the way the residential furniture industry has, it is not completely impervious. U.S. Department of Commerce figures show cabinet imports in 2002 increased by 9.9 percent over 2001, to $593.2 million.

	Although Canada ranks first in cabinet exports to the United States, Chinese cabinetry is moving up. Empire Industries Inc. sells its imported Windsor Chinese vanity line made from solid alder in retail showrooms and Expo design centers. Jacob Goren, president, says the Paterson, NJ-based company has been importing Chinese cabinetry and other products for approximately 20 years.

Of the 46 countries exporting cabinets to the United States in 2002, Canada was the largest, accounting for $501.8 million. China ranked second at $41.1 million, followed by Italy at $16.6 million, Germany at $12.2 million, and Mexico at $9.0 million.

While overseas cabinets still make up only a small portion of the U.S. market, foreign manufacturers are making their presence felt in component production. “There are a number of companies that use imported components,” Bandur says. “We’re monitoring and watching the impact and keeping our options open.”

Ponder says that Republic has not yet seen much effect from China. He adds that Republic brings some raw materials and a few components from China, but no full pieces.

“We can get the job done in manufacturing faster ourselves than a company in China,” Ponder says. ”The prices may be cheap for imports, but imports are a problem when it comes to getting pieces just-in-time.”

O’Neill says Wellborn is a vertically integrated company and therefore outsources few parts to begin with, let alone importing them. However, she says “Some manufacturers are seeking out Chinese suppliers and other companies are buying doors and components.”

As an indication that some manufacturers are keeping their options open, several members of the KCMA recently toured Chinese operations to learn more about their products and systems.

Design Trends Status Quo
Cabinetry styles and “themes” for 2003 will not change much from last year’s preferences, according to the National Kitchen and Bath Assn.’s 2002 Design Trends survey.

According to the survey, the majority of consumers today prefer kitchen cabinetry in either a dark wood tone, such as cherry, or with an “aged” distressed or glazed finish. European-style and light colored kitchen cabinetry, however, still remains popular in the southern and western regions. Also continuing in popularity is the proliferation of wood mouldings and other decorative touches in knobs and range hoods.

The hot themes for 2003 kitchen designs include entertainment centers, “kid friendliness,” and adding a business area, laundry room or pet feeding areas.

New cabinetry accounts for 36 percent of the remodeling cost of a kitchen, the NKBA survey says. In a remodeled bathroom, cabinetry accounts for 21 percent of the cost.

The trend for bathroom cabinetry shows that cherry and maple will continue to be in vogue. Those surveyed also predict a trend in high-end homes toward more luxurious and elaborate bathroom styles, including the use of columns to give the room a Roman spa-like feel. Entertainment systems will also make a move into the bathroom, the NKBA survey reports.