Nexstar Contractors Say 2010 Will Be Better

DETROIT - According to the leadership of contractor group Nexstar, next year will be much better than 2009. This was good news to hear at the group’s Super Meeting in Detroit.

According to a recent member poll, “There is a general optimism that 2010 will be better than 2009,” said president and CEO Greg Niemi. “Very likely” things have changed.

When consumer spending loosens up, he said, consumer funds should be there because people have been saving at historic rates, “stashing cash. When confidence returns, spending will let loose,” and payments will probably be made in cash. It’s a market of stimulus, he pointed out, with all the incentives and rebates available.

“This has been an interesting time in our industry,” said Niemi. Of the group’s 400 contractor members, 50 percent participated in the financial survey. Nexstar member revenues are up 5 percent, he said, and profits are down 2 percent. “Some are challenged and some are succeeding.” According to Niemi, 50 percent of the contractors reported either flat or growing markets. The remainder reported a decline.

On the bottom line, 75 percent reported a break even or better. “Members have risen to the challenge,” he said. Their outlook for 2010, he said, showed that 85 percent-plus are optimistic.

Member contractors acknowledged that there has been a downturn, of course, but they also point out the benefits.

Yes, benefits.

“We’re down year on year, but it’s a good thing,” said Kenny Chapman, owner of Peterson Plumbing, Grand Junction, Colo. “It’s a cleansing that needs to happen.”

In addition, “Homeowners are investing in existing homes,” he said. “We’re helping them out with tax credits.” The company is seeing plenty of upgrades and replacements.

“Challenges make you pay attention and manage the bottom line,” said Matt Morse, owner of Precision Plumbing Services, Lombard, Ill. “I really think that people have been saving, they have money to spend,” Michael Salonon, owner of Rapid Response Plumbing, Heating and Air Conditioning, Glenwood, Minn. The indicators he has seen of a turnaround include people buying full systems, using tax and utility credits, and paying by check.

Contractors also indicated that consumers are more value conscious as well as energy conscious, and these factors also will add to the strength of 2010.

“People are looking for reasons to look good,” said Chapman. “It feels good to buy green.”

In today’s business reality “We need to work smarter and harder, and be bold,” said Niemi. Both time and money are stretched, and cranky consumers “are gonna test us.” Next year, he said, will be “a new decade of learning.” Contractors need to be committed to training and development, to the point of immersion, in order to make this projected growth a reality. “Team members realize they have to perform,” said Chapman, so “training becomes easier.”

FEEDBACK REQUESTED: What are your projections for 2010? Please send them to Barb Checket-Hanks at barbarachecket-hanks@achrnews.com.

Publication date: 11/02/2009

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