FIRST QUARTER PREDICTIONS
Crystal ball gazing is not a hobby of the professionals that participated in this online survey, but business forecasting could be considered a requirement for those intending to remain in business in the current economy. Forty-four percent of respondents expected the first quarter of 2010 to be better than the fourth quarter of 2009. Twenty-four percent were concerned that things would be worse and 32 percent cautiously wagered that the economic issues affecting the industry would remain the same.Looking past the first quarter of 2010, some economists are beginning to predict a rise in pent up demand. Necessity has been the governing ideology of consumers as of late, but other purchases - placed on hold for a time - are predicted to resurface as consumer confidence grows. Frivolous spending will most likely remain low, as consumers turn toward long-term investments with an established ROI, such as home improvements and energy efficient, green products.
Aaron York Sr., founder of York’s Quality Air in Indianapolis, sees this pent up demand as a great opportunity for HVACR contractors. “You can only hold back on needed purchases for so long,” he said. “As we have become more knowledgeable about our industry, we are now able to present solutions to customers’ problems which in the past we simply ignored. Consumers will purchase items from the contractor as we prove to them that they can’t really live a good life without proper indoor air quality.”
HIRING PRACTICES
Evidencing a slight uptick in optimism for 2010, 54 percent of respondents said they were intending on hiring in the first six months of the year. Twenty-percent are still standing on the cautious side of the fence and will not be making plans to hire until possibly the second half of 2010. Some were not as greatly affected by the economic downturn due to business structuring and standard operating platforms but most of the HVACR industry, as well as much of the nation, tightened their belts in some manner over the past year.“We’ve been forced to operate lean and mean to survive and thrive in this recession,” said Rich Morgan, president and CEO of Magic Touch Mechanical Inc. in Mesa, Ariz. “The fact that the economy hit bottom and can only go up from here will require us to beef back up in order to meet demand and therefore start hiring for several positions in early 2010. We feel that need will continue in the second half of 2010 as well.”
After surveying 41 contractors on The NEWS Website, here are the compiled data results. All percents were rounded to the nearest whole number.
REFRIGERANT PREPARATIONS
Participants were overwhelmingly prepared for the R-22 phaseout that became official just a few weeks ago. Ninety-three percent said they were ready, leaving a mere 5 percent unprepared, and 2 percent with no response.The deadline passed seemingly quiet, and the new question being raised among HVACR forward thinkers is, “How long will R-410A be the new standard?”
Other industry concerns include the price and availability of R-22 and if the recently increased reclaim efforts will be enough to stave off demand inspired price spikes. But for now, the deadline has passed and prepared contractors continue to educate their employees on the proper installation and service of units containing R-410A.
“We stopped offering R-22 equipment early in 2009 and have maintained an inventory of R-22 because of our existing service base,” said Ken Bodwell, president of Innovative Service Solutions in Orlando, Fla.
“We also held a refrigerant training class earlier this month. Our thought is to create awareness early in the year. We are considering putting a class on for our industrial clients, again, to heighten awareness.”
HEALTH CARE ATTITUDES
It hasn’t passed through Congress yet, but Obama is pushing to have the finalized version of the health care bill on his desk by the State of the Union address which was given on January 27. Of the 41 respondents that participated in the survey, 81 percent consider a passed health care bill to have a negative effect on their business, and 17 percent felt it would be a positive move. Two percent made no response.“The proposals now being debated are a masterful keg of worms,” explained York. “Once the bill is passed, we will learn to live with it. No one company is being singled out; it affects all of us and being negative will only diminish our effectiveness and create more problems.”
Despite the positive attitudes, the respondents to the survey and those further questioned displayed an overall concern that the passage of a health care bill would not be a help, but rather be a hindrance to their businesses.
CLIMATE BILL CONCERNS
The climate bill is even further off than health care, and the opinion of those surveyed is split almost evenly. Those who thought it would affect business negatively edged out the positive respondents with percentages of 59 and 41, respectively. More interestingly than these results were the percentages recorded when asked, “Do you think the climate bill is necessary?” Thirty-seven percent answered affirmatively, however, 63 percent considered the climate bill as an unnecessary piece of legislation.“Climate change is still not proven,” said Dave Wingert, controls designer and service, Swift Air Inc. in Sioux Falls, S.D. “The fact that the environmental movement has now changed their key phrase from global warming to climate change has raised some questions and there are too many climate scientists that object to the theory that this climate change is man made.”
Bodwell has a different theory of climate change and its overall effect and necessity.
“I do not believe in cap-and-trade, but I do believe there should be a focus on energy conservation with incentives for business to incorporate energy savings and reduction of the carbon footprint,” he said. “When we instill government regulations, we demotivate private industry and encourage businesses to find opportunities to circumvent the guidelines. There should be incentives for the trades to promote conservation measures.”
2010 LANDSCAPE
With 2010 gearing up for economic recovery, hiring practices, health care, climate change, regulation, and much more will continue to shape the HVACR landscape. What the future holds is yet to be seen.Publication date:02/08/2010
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