Judging by activity so far this year, builders and industry observers expect this to be the year that puts the Great Recession firmly into the past.
“The last several years have been like a roller coaster,” said Kevin Ford, president of Pool Builders Inc. in Davie, Fla. “Any stock market downturn or significantly bad news … had an effect on purchasing decisions. It seems that’s behind everybody. I think everything’s getting back to more of a normalcy.”
Most wouldn’t go so far as to say business has flexed back to 2005 and 2006 numbers, but contractors across the nation expect a great 2015. “It’s definitely back to life,” said Mike Geremia, president of Geremia Pools in Sacramento, Calif. “It certainly is much improved compared to 2012 and 2013.”
With housing starts up and unemployment down, most indications point to a hopping year. So do leads and sales so far, with contractors reporting double-digit increases, and upswings in residential and commercial activity.
Builders project increases ranging from 10- to 30 percent over a 2014 that was pretty good it its own right.
“Last year was one of my biggest years we’ve had in quite a while, and this year we’re up,” said Lee Valenzuela, president of New Image Pool Interiors in Clovis, Calif., which has been in business since 2006.
Even those coping with regional challenges have generated higher leads.
Of course, weather is the big obstacle for the Northeast. In April, when builders normally can work with some regularity, they were still holding their breath each day, hoping to get some work in.
“Typically we’ve started digging in mid-February, maybe the end of February,” said Bruce Bagin of B&B Pool and Spa Center in Chestnut Ridge, N.Y. “We were in March, and the ground was still frozen and covered with snow. So it put our construction schedule 4½ to 5 weeks behind.”
It’s caused strain meeting payroll with little to no cash flow. “But it looks like the light at the end of the tunnel with all the work we have backlogged,” said Bill Drakeley, principal of Drakeley Pool Co. in Bethlehem, Conn.
Once they can start building with some regularity, the question is whether all the work can be completed in the small window of time allotted. “Everybody wants to swim for the Fourth of July weekend, but there are only so many people you can accomplish that with,” Bagin said.
These builders are relieved to have a backlog, but can’t help wondering what if. “The good news is, the weather is lousy and people still want pools,” Drakeley said. “Imagine if the weather were still good!”
In California, despite the historic drought, building is up. “It seemed like it really took off in the middle of January, and just has not slowed down,” Geremia said.
That’s a relief to builders there because the Golden State was one of the last to normalize after the recession.
But the drought has had its impact. Though new construction is very much on the rise, consumers are hesitant to renovate. “People want to be good citizens and not drain their pools,” Geremia said.
Valenzuela saw leads slow down shortly after Gov. Jerry Brown’s April executive order that Californians reduce urban water use by 25 percent. “I’m a little worried about what’s coming up,” he said.
Business in Texas also has remained brisk, with some observers hearing about year-over-year increases as high as 30 percent — and this after a very good 2014. “Texas is just on fire,” said Greg Howard, president/CEO of the buying group Carecraft, based in Carlsbad, Calif.
But contractors in Texas also will be watching leads closely. Generous precipitation through winter and early spring has removed the specter of drought, while also preventing excavations.
“The weather had a major impact on us,” said Debra Smith, president of Pulliam Pools in Fort Worth, Texas. “We’ve only been able to dig two or three pools a week. … As I’ve seen in the past, if it continues to rain into May, then people may wait to decide until next year.”
But there is a more long-term worry for the Lone Star State, especially areas relying on the oil economy. Recent reports show layoffs in the tens of thousands in the wake of dipping fuel prices. Houston’s Baker Hughes just announced plans to let 10,500 workers go.
Pool business is still normal, but the local industry is on alert. “We had [our first] cancellation yesterday because the person had their hours reduced considerably,” Smith said. “We’re hearing more feedback from people who have been downsized because of the prices of gas and oil.”
In Phoenix, permits are up about 14 percent. Though healthy, that’s down from about 20 percent earlier. “Phoenix got off to a really roaring start the first quarter, but I’ve seen it dip a little,” said Tim Murphy, president of Presidential Pools in Gilbert, Ariz. “It’s a little bit concerning.”
In Florida, home construction and property values are up, and things point to a good year. “I have a feeling this is going to be a breakout year for south Florida, if not Florida as a whole,” Ford said.
A sure sign that things are approaching normal: Pricing is on the way up. Builders in some areas can get almost the same margins as before, boosting revenue even more. “We’re up about 42 percent in revenue dollars, and then in number of pools, we’re up 20 percent,” Murphy said. “We’ve raised prices considerably.”
But Texas and parts of California are still quite competitive, forcing some to collect less than they did 10 years ago. “All the builders complain that all the other builders are too cheap,” Valenzuela said.
Still, price alone doesn’t guide most buying decisions, said Dick Covert, executive director of Master Pools Guild, headquartered in Richmond, Va.: “The consumer is again looking for the best builder, not the cheapest.”
