The past few years have been challenging for bathroom manufacturers and retailers. Following a post-pandemic surge, the market has faced a downturn as consumers pulled back on discretionary spending due to the rising cost of living.

Ex-factory bathroom sales in 2024 are expected to close at around 5% lower than the previous year. Nevertheless, there is cautious optimism for 2025. 

In the next twelve months, economic stability is expected to bring modest growth back to the bathroom sector. Although the GDP growth forecast is weak, it is anticipated to be steady, providing a predictable environment that could help consumers feel more confident about discretionary spending.

The refurbishment, maintenance, and improvement (RMI) sector, which accounts for over two-thirds of bathroom sales, is expected to grow by 3-4%. 

With inflation appearing to be under control and a potential tapering of interest rates on the horizon, consumer affordability could see a boost.

The Bank of England’s base rate is expected to drop below 5% by the end of 2024, a development that could stimulate housing transactions. Since bathroom upgrades are closely tied to property purchases and renovations, increased housing market activity could directly benefit bathroom manufacturers and their retail partners.

While lower interest rates may not return to pre-pandemic levels, even a marginal decrease will improve borrowing conditions, potentially releasing pent-up demand for bathroom refurbishments. 

The recent budget’s investment commitments provide significant opportunities for the bathroom industry. With billions earmarked for infrastructure, schools, and hospitals, manufacturers could see an increase in demand for commercial and institutional bathroom installations. 

Positive signs

While the government’s ambitious target of building over 300,000 new homes per year may be overly optimistic, estimates suggest that achieving even 200,000 new homes annually would create substantial demand for bathroom products.

As the government takes steps to address housing shortages and implements planning reforms, bathroom manufacturers stand to gain from the continued push to expand the housing market. 

Another external factor that could influence the bathroom industry is the geopolitical climate, especially in the United States. With the recent US elections, any potential shift in trade policies under a new administration could have global trade repercussions.

Given the interconnectedness of supply chains, manufacturers may face cost increases or supply disruptions if tariffs are implemented or if there is broader economic instability stemming from the world’s largest economy. 

The bathroom industry also faces a long-term challenge related to skilled labour shortages. The availability of trained installers remains low, adding another layer of difficulty to fulfilling the anticipated demand for bathroom renovations. 

Skills England’s initiatives are designed to expand the workforce in critical trades, but addressing this shortage will take years. Until these efforts bear fruit, the limited availability of skilled labour could constrain the growth potential in the bathroom industry.

For bathroom manufacturers and their retail partners, the year ahead holds a mixed but promising outlook. While the sector is set to benefit from steady growth in the RMI segment, favourable interest rate trends, and government investment, companies will need to carefully navigate rising labour costs and potential global economic turbulence. 

The biggest opportunity for the industry is the chance to be masters of our own destiny again. The eight-year crisis brought about by Brexit, Covid, and fiscal volatility is behind the UK. We have a solid base; if we can collectively foster positive consumer sentiment, our industry will be on a winning path.