Don't let the naysayers in the national press get you down, says Bathroom Manufacturers Association CEO Tom Reynolds – 2023 still holds plenty of opportunities for our sector.
It's hard to believe that it has already been a year since I wrote a blog for KBBFocus about how we should stay optimistic about the KBB sector in 2022. In it, I discussed how the prevailing pessimism around the emerging cost of living crisis may have made us question our ability to make progress over the next few years. But I argued that even though it seemed like a daunting challenge, there were still reasons to be hopeful. If we look back at how quickly different sectors, including ours, have adapted to the changing landscape – why couldn't we succeed?
It appears that my optimism was well-founded, as the latest consolidated sales data from the BMA shows that bathroom manufacturers have had a strong year despite the economic headwinds. Members' sales still managed to exceed £1.2billion, 5% up on the prior year – an impressive feat considering the relentless barrage of bad news in the national press. Price rises across the industry mean this was a volume contraction of the market, but let's not forget that the previous year had unparalleled high levels of pent-up demand. It was a great performance and, I would argue, the start of a return to the pre-Covid growth trajectory.
But the question remains – how do we forecast for the coming year? With inflation still in double digits and no sign of a resolution to the Ukraine conflict, any predictions are going to be very difficult. Inflation will mean cost increases across all sectors, while uncertainty surrounding energy prices may result in an even more volatile market this year. This means that bathroom manufacturers must adjust their strategies accordingly, depending on the market dynamics as they develop.
As I've said before, we can't ignore the difficult economic conditions. But neither should we be pessimists. Despite the challenges, bathroom manufacturers are well-placed to take advantage of the opportunities that will come in the year ahead. The foundations of our industry are strong, and with sound management and a solid strategy, we can overcome the challenges.
The Pound’s recovering strength against the US Dollar should give manufacturers cause for optimism. Rishi Sunak's administration has provided greater economic stability than Boris Johnson’s or Liz Truss’ ministries, leading to stabilisation and a slight appreciation of Sterling on foreign currency exchanges. This makes importing components much less expensive, allowing retailers and manufacturers to recover lost margins.
Furthermore, the Office for National Statistics has reported that the savings ratio is still higher than pre-pandemic levels – meaning there’s still cash in the economy. I think that drove the economy to grow in November when the World Cup provided a tonic to ailing consumer confidence. I still feel people are looking to invest in their bathrooms.
It's clear that the KBB industry needs to stay vigilant and not allow the ongoing negative sentiment about the economy to become a self-fulfilling prophecy. The fundamentals of our industry are still sound, but we must keep adapting our strategies to fit a volatile marketplace. We should make the most of opportunities and keep our gaze firmly on the future. Our industry has proved time and again that it can overcome even the toughest of challenges – let's make sure this time is no different.