President’s Report

The beginning of 2023 brought optimism that the U.S. would avoid a recession. Many of our members still have strong backlogs of work, with a severe shortage of manpower being the greatest challenge to growth in our industry. Despite the drop in material prices and increase in availability over 2022, inflation has continued to lead the daily headlines. International tensions with China and Russia, along with problems in the banking sector, have dulled that optimism for many of us. As I write this column, I cannot help but wonder if the economy is headed for a recession and how that potential, in addition to these outside issues, will impact our industry and our members.

One thing is obvious, and that is money will be tighter in the months to come, and the cost of money will be higher. This will certainly have an impact on small businesses and on new construction project funding. We must be prepared for change and ready to pivot strategies to maintain the health of our businesses.

I hate being the harbinger of bad news, but I believe there should be great concern related to the efforts of China and Russia toward global realignment and away from the U.S. dollar. While there is little we can do individually to stop this potential threat, I hope our government has its eyes wide open and can rally back the strength and worldwide respect for the U.S. and the stability of the U.S. dollar in the global market. Competition makes us stronger, and this is a competition our nation must win for our economic health and that of the entire world.

I’ve heard over a thousand times that all politics is local. I have always tried to ignore what is going on nationally and globally, intent on focusing on what is happening to me and my business and handling what I could control while letting the things that were outside of my control handle themselves. I’m not sure we can ignore the outside influences right now, as it feels like we’re on the precipice of a recession that I hope and pray will not come. Unfortunately, hoping and a positive attitude will not change whatever economic issues are on the horizon. I want to encourage all our members to stay focused, hope for the best, and be prepared for change.

If your business depends on a relationship with a lending institution for a working line of credit, talk to your banking representative to know what they’re thinking and where their institution is headed—don’t get caught flat-footed! If you work in a state where pre-liens are required to protect your rights, make sure you are filing paperwork and keeping receivables on a short leash. During tough times, cash is king and can be difficult to hang onto as suppliers and lending institutions tighten credit limits and terms.

G. Michael Hopf wrote in his book, Those Who Remain, “Hard times create strong men. Strong men create good times. Good times create weak men, and weak men create hard times.” Hopf’s view of the cycle of strength and weakness can be seen in how older generations see those who follow, who seem to have it easier or have less respect for their elders, and who are less patriotic than prior generations. We created the next generation and worked hard to make it easier for them, so they didn’t have it as tough as we did. We didn’t do them any favors; it would seem. Ask anyone of the greatest generation if they believe this to be true.

This cycle also applies to economics. We’ve had it good economically for a very long time, and while nothing good lasts forever, neither does anything bad. We can survive the impending negative and difficult economic cycle with eyes wide open and some careful business planning, but the time to prepare is now. Don’t wait and see. Don’t let your business get culled from the herd. We need every AFSA member to be strong and survive whatever comes our way. Even if we don’t see a recession, being prepared is always a great business strategy.

I can recall many tough economic downturn cycles, especially around 1982. Money was expensive, projects were being canceled, and everyone in the company I worked for at the time took a 10-percent pay cut to help keep the company afloat. We were bidding and taking work below our break-even costs to keep the lights on and live through those tough times. By the way, that company is still here today and dominates its market because it never gave up on its core values and the support of its people.

My goal is to help our members be as strong as possible, to keep our industry strong and our association stronger. I don’t have a crystal ball and cannot predict the future any better than any of you or the talking heads I see on the news. But I can encourage our members to be prepared for the potential of rough seas ahead while remaining hopeful the economic storm will pass, and we will continue to enjoy smooth sailing.

I have always heard that sprinkler contractors don’t have time for training when times are good. When times are bad, we don’t have the money for training. AFSA has the education you need for your people to be stronger and help your business through whatever comes our way. If we don’t see a recession, you’ll need more people trained for the additional work available. If we do see a recession, you will need the best-trained people who can do more with less—to help you through a downturn. AFSA leads the way in educating the people needed to deliver the solution! Thank you for your continued membership and support. We hope to see all of you in Orlando at AFSA42.

ABOUT THE AUTHOR: Bob Caputo, president of the American Fire Sprinkler Association (AFSA), is chair of the NFPA 24 and NFPA 291 technical committees and a member of multiple NFPA technical committees, including NFPA 13 and NFPA 25.  Caputo is a contributor of the NFPA 13 and NFPA 25 Handbooks, and the NFPA Inspection Manual. A senior member of NFPA and AFSA faculties, Caputo has written and presented seminars worldwide on fire protection and life safety systems and is a regular speaker at AFSA and NFPA conventions. Caputo is an instructor at the National Fire Academy and an advisory board member at Oklahoma State University School of Fire Protection Engineering & Safety. Caputo’s industry distinctions include “Fire Prevention Officer of the Year” from San Diego County in 1994, “Man of the Year” from Fire Protection Contractor magazine in 1997, and the Henry S. Parmelee award from AFSA in 2017. Caputo attended the University of Albuquerque, New Mexico, and is a U.S. Navy veteran and former volunteer firefighter.


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