Review and Forecast for the Fire Sprinkler Industry
As everyone is settling into the New Year, professionals in the fire sprinkler industry are reflecting on 2018 and looking for predictions on 2019. With overall construction growth slowing down over the last few years, 2019 looks to follow the same pattern. According to Engineering News-Record (ENR), surveys indicate that markets will slow in 2019. Dodge Data & Analytics reports that construction starts grew 3 percent from 2017 to 2018, and starts for 2019 are expected to rise only 0.2 percent. FMI Corp, Raleigh, North Carolina, focuses on construction put-in-place and calls for a 5.6 percent growth in 2019 after a 5.5 percent rate in 2018.
For the residential sector, FMI expects housing to grow 5.9 percent, slowing from a 6.7 percent rate last year. Dodge expects housing to turn down 2 percent in 2019, with multi-family housing dropping 6 percent and single-family construction staying flat. However, the National Association of Home Builders (NAHB) predicts single-family housing starts will show a 4.7 percent increase from 2018 and a multi-family housing drop to 4.4 percent drop in 2019.
Read detailed reports from all sectors of the construction industry throughout this issue of Sprinkler Age, including Associated Builders and Contractors (ABC), Associated General Contractors of America (AGC), Dodge Data & Analytics, and Portland Cement Association (PCA). The American Fire Sprinkler Association (AFSA) also surveyed members throughout the country to gauge the industry’s activity in 2018 and to ask what they anticipate in 2019.
How was business in 2018 and how does business look for 2019? Responses for the how work was in 2018 and predictions for 2019 were overall positive. Most members who responded said that work has been good to great.
On the West Coast, things have been going well. “Excellent in all areas – new construction, tenant improvements, service inspections, and maintenance,” reports Jeff Bridges, JB Fire Protection, Inc., Fullerton, California. “A few large-scale projects are already under contract for 2019!”
AFSA Region 1 Director Lyle Hall, Western Fire Protection, Poway, California, has also been “very busy” in 2018, and “the New Year looks to be busy but probably not as busy as 2018.”
In San Ramon, California, Fred Benn with Advanced Automatic Sprinkler, Inc., reports “lots of work to bid.”
Bret Harmon, BlazeMaster Fire Protection, Payson, Utah says they’ve been very busy. “As of right now, there is still a lot of work bidding for 2019.”
John Marchette with Fire Suppression Systems in Bozeman, Montana, echoes that sentiment: “We’ve been very busy and anticipate continuing to be.”
Moving across the country, Vannen Crabtree with RNL Services, Inc., Richland, Iowa states that business has been “about average in 2018 and we are expecting the same in 2019.”
Mike Eggleston, H2O Fire Protection, Inc., Commerce City, Colorado says: “We were about the same as last year, but down just a little on the profit side due to material increases. Business looks to be better in 2019, as long as material will level out in the near future.”
In Michigan, business is going very well. Douglas Scott, Dependable Fire Protection in Cedar Springs says business has been “great, with lots of work for 2018, and 2019 looks great going in and through at least the third quarter very strong.” George Booth with Sentry Automatic Sprinkler, Inc., in Comstock Park and Rick Jackson with Jackson Associates, Inc. in Commerce Township, have seen the same. “We are very busy with sales up 20-plus percent,” says Booth. “There’s no slow down for 2019.” Jackson reports that business was “excellent for 2018 and looks good for 2019.”
Ohio appears to have also had a good year, but perhaps with some slowdown in 2019. “Business was excellent for 2018 but we predict leveling off in 2019,” says David Ritchey with Hercules Fire & Plumbing in North Ridgeville.
The Northeast has been busy. For Deborah Winters at Firetech Sprinkler Corp. in Colchester, Vermont, business was “excellent” in 2018, although she is looking at 2019 to be “more typical with fewer larger jobs.”
In Massachusetts, both Chad Dubuc with Rustic Fire Protection in Norton and Thomas Grealish with Fire Sprinkler Corporation in Quincy were busy. And each company expects the same for 2019.
In Chesapeake, Virginia, Belinda Arthur with Hiller Systems, reports 2018 was “good” and the outlook for 2019 is “great.”
In the Southern states, “Business was great!” according to Joe Black, Sentry Fire Services, Inc., Greenville, South Carolina. “Construction is booming in the Upstate. If you are not busy, then you don’t want to be. Things are looking to be bigger and better in 2019 – all things are looking up.”
Paul Hensley, Advanced Fire Protection, Inc. in Travelers Rest, South Carolina has seen business “a little slow, but the bidding process has been good in this area. It looks about the same or a little better for 2019.”
In Florida, Jim Gaffney with Titan Fire Systems, LLC in Cocoa, reports business in 2018 was good. “Inflationary pressure has presented us with the biggest challenge since the late ‘70s in that regard. Finding labor at any price has been a challenge.” For 2019, Gaffney expects “the New Year looks to be moderating with continuing price pressure from both sides.”
Cal Bruce, Fire Technology, LLC, Augusta, Georgia has some concerns going into the New Year. He says 2018 was “busy but flat on profits. We can’t find help. We are uncertain about 2019 at this point.”
Bill Shipman with Fire Sentry, Inc. in Amarillo, Texas, reports that “last year was much better than in the past, and 2019 looks to be better than 2018.”
Do you foresee any problem areas for 2019? Manpower was one of the top problems cited for the coming year, according to survey responses.
“The manpower problem is only getting worse,” says Benn. “If business slows down and men leave the trade, manpower will become a major problem when business improves.”
Nearly everyone agrees. Marchette adds that there is a “lack of trained, qualified, and motivated technicians.”
Black notes that in addition to the same issues “we have had to deal with for years, Authorities Having Jurisdiction (AHJs) are not understanding our work.”
Another potential problem is tariffs, according to Scott. “Tariffs – government regulations such as paid sick leave, higher minimum wages, steel shortages, and labor shortages.”
How is retrofit work? Retrofit work appears to be steady across the country. Black reports it’s “great” in South Carolina, and while Hensley agrees, he notes they don’t do a lot of that type work. Elsewhere in the South, Bruce has seen “five percent or less” in his area and Gaffney notes “it is a small percentage of our work except at Kennedy Space Center and Patrick Air Force Base.”
In Texas, Shipman states: “We don’t do any retrofit work. We refuse all retrofit and new construction. Instead, we concentrate on inspection and repair.”
In the Northeast, responses to the retrofit work question were “busy,” “on the rise,” and “consistent.”
In Michigan, Booth notes that “80 percent of our work is retrofit,” Jackson says it’s been good, and Scott says “it is really up.”
Moving westward, Crabtree reports “about 50 percent of what we do [in Iowa] is retrofit.” Eggleston states that they don’t do much retrofit work in Colorado due to the lack of manpower. “But what we do is going great and right now the market is full with jobs to bid,” he says.
Retrofit work in Utah is “steady” per Harmon.
Bridges states that there is “a decent portion of [retrofit] work in California, due to the amount of construction.” Hall has seen it “very busy” as well in the state.
“We do mostly testing, inspection, and repairs [in Montana],” notes Marchette. “We do some retrofit work but only small jobs. Constant work is available.”
Does your company do much NFPA 13D, Standard, for the Installation of Sprinkler Systems in One- and Two-Family Dwellings and Manufactured Homes, work? Responses were divided on this topic. Benn (California) and Harmon (Utah) note their companies do. Others report doing a little residential work or seeing that area growing. Hensley works a little on those projects and Scott has seen growth in this area over the past five years.
Bridges states it’s about “10 percent of our sales” in California and Crabtree says “15 percent” in Iowa.
Grealish has seen NFPA 13D work “mainly in three-family homes being converted to condominiums.”
Has there been any increase in residential activity in your area? Areas such as California have required residential sprinklers for many years so most of those areas report steady work. Benn and Hall note that they’ve actually seen a slowdown in their areas of the state.
Elsewhere, Harmon notes that in Utah it has been “very steady for the last couple of years.” Marchette reports that he’s seen an increase in Montana as well. Eggleston has seen some increase “with a few cities requiring all homes to be protected.”
In Michigan, Scott says that “many apartments and townhouses are being built” so he’s seen a rise as well.
Winters comments that while “multi-family is steady,” there hasn’t been an increase in Vermont because “single-family is not mandated for the most part in the state.”
In the South, Gaffney notes there isn’t a lot of activity in the single-family market in Florida, but they’re seeing a lot of multi-family and senior citizen residential work. And in Georgia, Bruce has only seen an increase in apartments which is actually starting to slow down as well “due to over building.”
Has there been any local legislation regarding sprinklers? There hasn’t been much activity regarding local legislation and fire sprinklers, based on member responses. One issue that Sprinkler Age reported on is California fitter certification. Bridges notes that the state has been enforcing it as of July 1, 2018. (See related article in the November/December 2017 issue of Sprinkler Age.) “The state fire marshal’s office currently has a focus group working on state requirements for inspection, testing, and maintenance,” he says.
Marchette responded that Montana is working on implementing the 2018 International Building Code.
New Year, Same Issues It seems work has been steady for most of those within the industry and will continue to be so into 2019.
“Consumer confidence can change in the blink of an eye, so it’s in the good years that we prepare for the bad ones,” notes Bridges.
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