Members Surveyed for Outlook on Fire Sprinker Industry
As the New Year begins amid supply chain delays and a rise in the omicron variant of COVID, the construction industry continues to push forward. Member reports and professional forecasters in the sprinkler and construction industries seem to agree with last year’s predictions: “cautious optimism” going into 2022. What does this year hold for the construction and fire sprinkler industries? Sprinkler Age has compiled reports from professional industry forecasters and American Fire Sprinkler Association (AFSA) members to gauge business last year and gain insight into 2022.
Annual reports detailed in Engineering-News Record (November 18, 2021) include Dodge Construction, which predicts $892.6 billion in construction starts, a 12-percent increase for 2021, and $946.5 billion in construction starts for 2022, a six-percent increase. For residential construction starts, Dodge forecasts a four-percent growth for single-family in 2022, after an expected 17-percent jump in 2021. Dodge also predicts a 19-percent increase in 2021 and a 5-percent increase in 2022 for multi-family starts. For non-residential starts, an 8-percent rise is expected this year after a 12-percent jump last year. Labor and material shortages and increasing prices are noted as challenges for the New Year.
FMI Corp. is forecasting construction put-in-place for 2022 to be $1.560 billion, up from $1.519 billion in 2021. Total residential is expected to rise 2.7 percent in 2022, with a 4.1 percent rise in single-family and a 4.9 percent rise in multi-family construction. This comes after an expected 12.3 percent increase in total residential construction put-in-place in 2021, with single-family at 14.1 percent and multi-family at 4.8 percent. Total non-residential is expected only to climb 1.8 percent from last year.
The National Association of Home Builders (NAHB) estimates total housing starts will show a 13 percent increase for 2021, with single-family units up 10.7 percent and multi-family housing up 19.3 percent. For 2022, it forecasts a 1.7-percent drop in overall starts, with a 0.2 percent increase in single-family and a 6.2 percent decrease in multi-family.
Additional construction forecast reports can be obtained at enr.com and constructionexec.com. For insight on the fire sprinkler industry last year and what’s expected for 2022, Sprinkler Age surveyed members throughout the country and compiled their comments here.
For 2021, Jeff Bridges, president, JB Fire Protection, Fullerton, California, reports that “COVID had little effect beyond the challenges created by supply lines” and that they “have a solid backlog already for 2022—it’s looking like another good year.”
He notes that problems for the coming year include “maintaining and, more specifically, expanding our workforce has been an ongoing issue for a few years. The lack of qualified help seriously stunts our chances at growth.”
Bridges continues: “Retrofit work continues to be a solid portion of our work, and industrial retrofits specifically have been solid.
Regarding NFPA 13D, Standard for the Installation of Sprinkler Systems in One- and Two-Family Dwellings and Manufactured Homes, installations, he says that “California requirements for fire sprinklers have increased new installs and retrofits of homes. Multi-family housing is ‘off the charts’ in the number of jobs in progress. While business remains robust, volatile material prices and flat pricing of jobs keep it challenging to grow a business.”
In Northern California, Wayne Weisz, executive vice president, Cen-Cal Fire Systems, Inc., Lodi, California, notes that “in spite of everything COVID-related, 2021 was a good year. In the areas of California that we service, there really was no slowdown. We stayed very busy.”
Weisz says that for 2022, “commercial and multi-family work has been very steady. The first half of the New Year appears to be very solid, with most contractors we know having very strong backlogs. It’s anyone’s guess what may happen in the second half of the year.”
“We saw some supply issues in 2021,” he states. “Lead times for certain materials got longer in some cases, and we are not seeing much change there going into 2022. In addition, workforce issues continue to plague everyone, which affects our trade and virtually every business. COVID and some people’s non-willingness to show up for work have made for staffing problems that appear to extend into 2022.”
When asked about residential activity in the state, Weisz reports that “Contrary to what the media has said about a mass exodus from California, the single-family market is red hot. Homes continually sell within days of going on the market, with most getting the asking price. Housing tracts are going up everywhere in our area. Multi-family new construction is as strong as it’s ever been.” He also says that NFPA 13D work is steady and should remain the same through 2022.
Joseph Faulkner with Sprinx Fire Protection, Inc. in Gig Harbor, Washington, reports that in 2021, the company “was shutdown initially for about three weeks. After construction was identified as ‘essential,’ business was sluggish but steady.”
“We have just about a year’s worth of work booked already,” comments Faulkner. “Business looks to be strong. Some projects are having financing issues, having to refinance. Prices of lumber may impact some of the wood-framed apartment complexes. Permitting is much slower than normal due to city employees working remotely.”
While the amount of retrofit work stayed the same in 2020 for Sprinx, its single-family division increased, and single-family and multi-family residential activity grew.
He concludes: “I expect the economy to be strong in 2021, but retract slightly in 2022.”
Tracy Wilson, Inland Fire Protection, Wenatchee, Washington, also saw NFPA 13D installations increase last year. “Construction did not seem to slow,” she notes. “Part of our increase may have been due to a large amount of rural construction where fire-flow requirements forced homeowners into including fire protection to achieve credits where water was not available.” Wilson also saw stricter enforcement of fire and building codes for large single-family homes.
She reports that 2021 was “very busy with lots of delays due to construction material shortages” but remarks it was still “one of our busiest years.” This year looks to be just as busy, with Wilson saying, “Residential single-family homes do not seem to be slowing down even with material costs skyrocketing. I am seeing more government-funded and private sector projects that have been in the planning last year look to be moving forward with construction in 2022.”
“I expect 2022 to be a continuation of material shortages, construction delays, and proof-of-vaccination issues,” she continues. “On the upside, people seem to be more patient and accepting of delays.” Another area of concern for Wilson is a growing population deciding “work is not an option.”
“Good” is the word used to describe business last year, and going in 2022, reports Roger J. Wallace, regional manager, Rapid Fire Protection, Inc., Colorado Springs, Colorado. He does note that container ship delays are starting to impact material availability. “Hopefully, manufacturers will consider the resettling of their foundries back into America. Material costs are going out the roof, but we hope to stabilize the cost. Every trade is impacted by the volatility of these cost increases.”
Wallace says the State of Colorado is in the process of developing its own fitter’s test. “We are participating in these discussions, and we appreciate the input from AFSA. We should be able to write a very comprehensive test. We are working on getting the test program set up before fitter license renewals. Our involvement is important to the process, and we have input with an item that involves our industry. Being proactive is better than being reactive to changes.”
The area has seen some code adoptions in the hillside areas. “We were very proactive in these changes,” he notes. “The Marshall Fire will have a direct impact on future housing and new fire code regulations in numerous cities across America. It’s a shame we have to experience something like this to make changes, yet that is how the development of code changes start.”
He continues: “Locally, we implemented the requirement for screened vents; the installation of said vents to block flying embers from entering an attic; the usage of non-combustible materials in the exterior construction of homes; and banned wood planking on decks and soffits unless they were pretreated. Several communities have adopted these changes in their jurisdictions. The list is evolving as we identify new products.”
Wallace, who serves as chair of AFSA’s Colorado Chapter, encourages members to get involved. “I see the positive impacts that AFSA and our Colorado ChaPter make in multiple communities. We are very proactive. One must participate to have a say. Standing on the sidelines makes you a bystander who will get run over.”
Doug Stoeckel, Protegis Fire Protection & Safety, Cincinnati, Ohio, reports that in 2021, “unprecedented material cost increases was our biggest obstacle to overcome. The volume of ongoing work and projects to bid continues to stay high going into 2022.”
For 2022, Stoeckel notes Protegis has a “healthy backlog and is hopeful for a good year.” That being said, “We are concerned that the trend in price increases will continue, which could affect construction going forward. In addition, manpower and training will continue to be a primary focus for decades to come.”
Regarding installations, Stoeckel says 50 to 60 percent of their work is retrofit of existing facilities, they have done “very few” NFPA 13D installations, and that multi-family housing has been “on fire” for several years and doesn’t seem to be slowing.
Linda Biernacki, president, Fire Tech Systems, Inc., Shreveport, Louisiana, saw 2021 start off “slow,” but “once things “started calming down from the COVID fears, we ended the year as one of our best.”
“Our backlog going into 2022 is strong,” she continues. “However, with the new Omicron variant popping up, many of our potential projects for the first quarter have been delayed in issuing an NTP [notice to proceed]. I am hoping this is just a temporary delay, and once we get through this variant, the focus will shift back to getting back to work.”
Finding dependable labor, supply chain issues, and inflation are the most problematic in Biernacki’s area. “I don’t see any of those issues going away in 2022,” she says.
Biernacki notes that training employees hasn’t been a real problem logistically, thanks to new learning options AFSA developed due to COVID. “As a member of AFSA, I am thankful for our leadership and staff in continuing to develop educational programming for its members, in a variety of formats, so members can choose what is best for their employees and their company. AFSA is best of class!”
Fire Tech Systems has some low-income housing/apartment projects and some apartments on the residential side, but that market has been slow to come back in the area. There also hasn’t been much change in the demand for NFPA 13D systems.
Fire Tech Systems has some low-income housing/apartment projects and some apartments on the residential side, but that market has been slow to come back in the area. There also hasn’t been much change for the demand of the NFPA 13D systems.
Steven Scandaliato, SDG, LLC, La Marque, Texas, saw a “significant slowdown” in 2021. “Projects were not canceled, but it took much longer to complete and get to billing milestones.” He predicts 2022 to be “good to excellent” and notes that “several” delayed projects are starting back up.
As noted by others in this article, the workforce has been an issue in years past, and currently, Scandaliato says. “Also, material and supplier delays are causing big problems and causing project billings to get drawn out several more months instead of weeks. The supply chain issue is going to be the issue for 2022. Having to wait eight to 10 weeks for valves and fire alarm equipment is creating big issues with project cash flow.”
Chris Kachura, P.E., major projects salesman and project manager, Southeast Fire Protection, Inc. (SEFP), Houston, Texas, says that business in 2021 was “better than expected.” He notes: “Across the board, we saw growth numbers that were ahead of expectations. Manpower continues to be an industry issue as we see fewer youth entering our industry. Couple this with COVID illnesses, and it made for an interesting year with managing manpower on projects. The bid market started slowly in Quarters 1 and 2 of the year, but closed much stronger in Quarters 3 and 4.”
Kachura says that SEFP “comes into 2022 with a contract backlog that was stronger than last year. The bid market already looks more active than it was at this time in 2021.” Problem areas for the coming year include finding a qualified workforce and COVID to some degree, although “it appears for the most part to be less of an impact than it was in Quarters 1 and 2 of 2021.”
Kachura hopes that trend continues. Still, he says that supply-chain issues remain the “single greatest problem for our businesses,” stating that “the volatility of the steel market has created numerous issues. We are seeing longer lead times in all our material lines.”
Residential activity is still seeing big growth in South Texas, but residential sprinklers are not required for single-family homes. NFPA 13D remained at the same pace for 2021, and Kachura expects that trend to remain the same for 2022.
Cal Bruce, Fire Technology, LLC, Augusta, Georgia, reports that 2021 was “on target with previous years.”
“I’m not sure about 2022,” he says. “Bidding is starting to tighten up with more bidders on fewer projects.” Bruce also noted that more general contractors are requesting vaccination proof.
Bruce saw a decrease in retrofit work in his area, and the company’s NFPA 13D and residential work has remained steady last year and going into 2022, with no significant changes foreseen.
Andy Johnston, fire sprinkler manager, Master Draft Plumbing Contractors, Daytona Beach, Florida, says business was “good” in 2021 and expects the same for 2022. He also doesn’t foresee many problems in his area.
Jeffrey Dunn, president, Carolina Fire Protection, Inc., Dunn, North Carolina, says that “business was steady in 2021. Our backlog remained strong throughout the year. Like everyone else, labor and material costs were higher than anyone could have anticipated. All in all, it was a good year. Supply chain issues are affecting business operations more than COVID right now.”
The outlook for Carolina Fire Protection’s region is “decent” heading into 2022. “It seems as though backlog is not quite to the point it was late last year, and that we will not be starting 2022 as strong as we did 2021.”
Dunn notes that an increase in labor and material costs is sure to continue early in 2022. “The supply-chain issues are a definite concern. The lack of building materials certainly affects our industry. As new variants to the coronavirus emerge, I think all businesses may have to pivot at some point and adjust. The labor shortage is a big concern for every business.”
Carolina Fire Protection did “about the same amount” of NFPA 13D work in 2021 as it did in 2020. “That type of work is not a significant share of what we do, and I expect it to be about the same in 2022,” Dunn says. He does note that retrofit work “increased slightly” in 2021 over 2020, “although that portion of work for us is not back up to pre-pandemic status.”
Ronald Davis, engineer designer, Clark Patterson Lee, Greensboro, North Carolina, says that in 2021, they “still had building design projects that required fire sprinkler design” and that business for 2022 “looks good.”
“Business was good this year,” says Terry Victor, Johnson Controls Fire Protection, Upperco, Maryland. “COVID-19 didn’t negatively impact our business and may even have had a positive impact overall. We did experience some resistance to performing inspection, testing, and maintenance (ITM) from some customers due to COVID restrictions, but we eventually worked through those.”
Victor reports that backlogs “look good” for 2022. “We expect a good year overall. The only remaining issues have to do with the supply chain and workforce. Of course, pricing is higher due to the supply and demand for construction workers and materials in general.”
Maintaining a workforce is an ongoing problem, in all areas, for Victor. “I believe the supply chain will eventually be corrected in early 2022, but hiring qualified individuals who want to work for a living is a huge problem. Training will be needed for all disciplines once people are hired.”
Marcelino De Celis, senior application engineer, fire systems, Armstrong Pumps, North Tonawanda, New York, says they had a “good year” in 2021, and they expect 2022 to be better than the past year. “Maintaining a workforce and deliveries are difficult because of supply-chain issues ongoing. We are looking forward to a good year this year!”
Albert Gentes, president, Alpine Sprinkler, Inc., South Burlington, Vermont, says that COVID “did affect” operations in 2021 and that he expects 2022 to be “so-so,” anticipating some issues going into the New Year, including needing manpower. “Everyone is having the issue of finding a qualified workforce, not just us,” he states. On a positive note, retrofit work did increase for the company. NFPA 13 projects remained the same.
Paul DeLorie, senior vice president, Hampshire Fire Protection, Inc., Londonderry, New Hampshire, reports that “Business was mixed [in 2021] as we had plenty of it, but it wasn’t very profitable.”
Going into 2022, DeLorie is “optimistic” that business will be better. “We have a great backlog, and that work has good material input costs. Our job mix is broad, and we can utilize our teams effectively.”
“The problem for this year and beyond is workforce and workforce development,” notes DeLorie. “This isn’t new, but it’s getting acute. Just like the rest of our industry, our sprinkler fitters are aging out, and we don’t have enough apprentices. Our design engineers are also aging out. Our design trainees are progressing, but they need more time to grow and excel. There are many work opportunities in our territory, but we are mindful of our engineering capacity and the dilemma of turning down opportunities. The very time-consuming nature of 3D design, modeling, and clash detection adds to our deliberation.”
Other areas of concern for DeLorie are COVID and the supply chain. “We have a few projects where we have been meaningfully impacted with our workers being ineligible due to a positive test. Also, we have some fitters and apprentices refusing to be vaccinated and risk not working when a given project or business requires vaccine verification.”
He continues: “Supply chain issues are limited to specialty items like diesel-driven fire pumps that now have very long lead times. So far, we can anticipate and plan our material acquisitions and build our work without interruption.”
Regarding residential activity in the area, DeLorie says that while they don’t have a mandate for sprinklers in single-family homes, “large apartment complexes are plentiful.” He notes that while they receive their share of those projects, they aren’t very profitable, saying it depends on the prime contractor.
As AFSA members across the country push forward and embrace all the challenges 2022 has to offer, they remain optimistic.
“We are thankful to still be in business, given all the world has faced over the last couple years,” notes Dunn. “Hopefully, the pandemic will subside for good, inflation will reverse its path, and the overall economy can get back to running smoothly in 2022.”
“The fire sprinkler industry is a great industry to be in—always has been and always will be,” notes Victor. “While many of our companies enjoy the financial benefits of having a thriving contracting business, we should be proudest of the lives and property we save through the installation and servicing of fire sprinkler systems. We provide a valuable public service that is seldom recognized or promoted. Keep up the good work!”
ABOUT THE AUTHOR: D’Arcy Montalvo is the public relations manager for the American Fire Sprinkler Association (AFSA) and editor of Sprinkler Age magazine.