As 2017 begins, pool/spa professionals expect another positive year, though some issues do weigh on their minds. Here’s a look at some of the good, bad and neutral issues to watch:
• The good news: Despite a rough campaign, industry business owners expect incoming President Donald Trump to create an atmosphere more friendly to their endeavors. “I believe you will find that the general ecomomy will be well-served by some of the Reaganomics that is most likely going to be put into place,” said Bruce Dunn, president of builder Mission Pools, in Escondido, Calif.
In addition to lower taxes and loosened regulation, professionals expect the new administration to generally enable an economy that places consumers in a better position to buy: If policies open the way for companies to thrive, they say, it will lead to more and better jobs, as well as bulkier stock portfolios.
“Put the money back in people’s hands and watch — the people will put it back into businesses,” Dunn said.
It seems citizens agree, as markedly higher consumer-confidence rates have been reported since November. The Conference Board’s consumer confidence index hit its highest level since 2001, at 113.7, compared with an expected 109.
“From what I hear from [pool] builders and service professionals, they’re thrilled,” said Lawrence Caniglia, executive director of the Northeast Spa and Pool Association.
• The neutral-to-positive: In December, Janet Yellen, chair of the U.S. Federal Reserve System, announced an increase in the agency’s benchmark interest rate, on which other rates are based.
While such hikes have historically given economic observers pause, this increase was slight — a quarter of a point, to 1.4 percent. And it was only the second increase in 10 years. But experts do predict more in 2017.
Industry observers believe this will have a net neutral to positive effect on sales. Builder Tim Murphy hopes the expectation of more increases will incite consumers to buy pools and homes sooner rather than later.
“There’s been a lot advertising on the radio and TV, with mortgage companies saying, ‘Hurry up, get your home loan now,’” said the president of Presidential Pools, Spas & Patio in Gilbert, Ariz. “I think a lot of people are going to refinance their homes, and things will happen from that.”
Some also hope the increased rates will motivate financial institutions to offer more financing.
More than anything, professionals believe any negatives brought on by the Fed rate hike will be minimized. “If you’ve got people doing better, and consumer confidence numbers are through the roof — people feeling more bullish — I think one offsets the other,” Caniglia said.
• Causes for concern: Business owners worry about the impact of new employment laws at the state and federal level. Several states have raised the minimum wage. In California, law now requires companies with more than 50 employees to offer at least three days of paid sick leave to full-timers. And workers’ compensation rates in Florida recently rose by 14.5 percent.
On a federal level, employers await the outcome of a recent Department of Labor change that would entitle overtime pay to more employees. Currently, those earning $23,660 per year or less must receive overtime when working more than 40 hours in a week. If the DOL change takes effect, workers can make up to $47,476 per year and qualify.
Business owners take heart from two roadblocks to the change: Legislation delaying it six months until June 1, 2017; and an injunction from U.S. District Judge Amos Mazzant of Texas, who said the DOL exceeded its authority in making the change. Between these developments and a new administration, company owners hope the change never materializes.