This being the holiday season, it is a great time to reflect on what we are thankful for. In fact, my 8-year-old son Ben got my family to go around the Thanksgiving Day table stating one thing we were thankful for in our lives. I might have missed the point as this was during halftime of the early NFL game and I stated I was thankful the Detroit Lions were covering the spread. We can get into my gambling problem at another date, but, suffice to say, the wife was not pleased.
HVAC contractors should have much to be thankful for, too, as all signs point to an economic climate that offers the opportunity for 2015 to be a very profitable year. It has been awhile since people in this industry have predicted a big year. Contractors I have talked with recently have forecast growth for the next year — some significantly so.
In fact, I corresponded with 10 contractors just this last week, and everyone was predicting a more profitable year. The average prediction was a 15 percent increase with more than a couple predicting more than 20 percent growth in 2015. Russ Donnici of Mechanical Air Service, San Jose, California, was projecting a 60 percent increase and said the company has a current backlog that is greater than any time in its 38-year history. That is, obviously, at the far end of the spectrum, but you get the point.
The reasons the contractors gave for the growth predictions varied. Items like construction expansion, consumer confidence, and solid customer service were all mentioned.
And, lest you think this is based solely on anecdotal evidence, the economic indicators are telling the same story. The November jobs report showed the U.S. economy added 321,000 jobs in November. This was significantly greater than the 230,000 predicted. The unemployment rate is 5.8 percent. You need to rewind to before the Great Recession to see numbers like that.
And, of course, the stock market is at an all-time high.
“The U.S. economy is holding the world’s economy together,” said Alan Beaulieu, economist, Heating, Air-conditioning & Refrigeration Distributors International (HARDI), at the association’s recent annual meeting. “The economy is growing and exciting.”
Beaulieu also said most people in the audience probably did not feel as positive about the economy as the numbers would indicate. I would predict that readers of this column feel the same way. Why that is, I am not quite sure. Perhaps everyone is still gun shy from the great crash of 2008. Maybe the mainstream media is quicker to point out the negative versus conveying the positive and that seeps down.
Whatever the reason, HVAC contractors should not be bogged down by the negative feelings about the economy. It has not affected the general public as consumer spending is solid. Now is the time to invest in your company and make some hay before the next inevitable downturn.
Enjoy it while you can because Beaulieu is predicting a smaller recession in 2019 and a full-fledged depression in 2030. Basically, it will be the 1930s economy with the Internet.
“Have big goals in front of you. These might require you to spend money, but now is the time to invest in yourself,” Beaulieu said. “If you don’t, in 2019, you will wonder how you squandered the opportunity.”
Contractors who survived the great recession need to change their mindsets. Business leaders needed to hunker down to get through the tough times but now they must enjoy the reward — a good and growing economy.
If I were a gambling man, I would say push your chips into the middle of the table and go big.
Publication date: 12/15/2014