The year 2020 is shaping up to be a good one according to results of a recent industry survey AHR Expo conducted ahead of its annual mega-tradeshow, which will be held Feb. 3-5 in Orlando, Florida.
HVACR manufacturers and industry professionals report a strong economy heading into the Orlando gathering. A total of 79% of respondents report that 2020 prospects for business are expected to be good or excellent.
When asked how 2020 prospects compare to 2019, 75% of the more than 1,400 respondents expect business to increase, while 25% expect business to increase more than 10%.
Looking back and comparing 2018 sales to 2019 sales, 70% of respondents reported at least 10% growth, while 34% report significantly more than 10% growth.
Respondents say the top three 2020 market segments with a good or excellent outlooks are light commercial (72%), hospital and health industries (67%) and residential (64%).
In terms of best prospects in 2020, 72% peg maintenance and replacement as the front-runner, with 67% mentioning retrofit/renovation and 64% for new construction.
Survey respondents also were asked how do customers allocate importance when choosing products? Reliability was the No. 1 most-important consideration by both AHR Expo attendees and exhibitors that took the survey.
For attendees, the top five featured first costs (No. 2), comfort (No. 3), energy efficiency (No. 4) and maintenance (No. 5). For exhibitors, the rankings look like energy efficiency (No. 2), indoor air quality (No. 3), first costs (No. 4) and maintenance (No. 5).
KBIS/IBS back in Vegas
Prior to AHR Expo in Orlando, Design and Construction Week, which is the co-located KBIS and International Builders Show, takes place Jan. 21-23 in Las Vegas.
Like AHR Expo, the National Kitchen & Bath Association released a pair of recent trends results. In terms of the NKBA and John Burns Real Estate Consulting Kitchen & Bath Market Index Q3 results, there were positive findings for the remodeling industry. With KBMI scores above 50, indicating growth, the quarter’s KBMI of 65.4 shows sustained expansion and is consistent with Q2’s index rating of 65.7.
In addition to the labor shortage, NKBA’s membership base cites rising prices of materials, size of customer budgets, fear of recession and labor costs as their primary concerns. With overall industry response to tariffs mixed, some members have been able to adjust to the trade issues, NKBA reports.
The majority of members (54%) report tariffs have made a moderate, high or significant financial impact to their business with manufacturers hit hardest at 59%. Notably, NKBA points out, one in three members have had to raise prices on products and material.
Other key takeaways include positive sales growth still was expected to be logged for 2019. Members expected a 3.5% sales growth for the full year, not quite as hopeful as the 4.7% and 5.4% growth predicted in the previous two quarters.
Also, industry health is stable, the report noted. Industry insiders, NKBA said, assess the health of the kitchen and bath business at 6.7, remaining steady from 6.6 and 6.8 in the first two quarters of 2019. Building and construction firms and retail dealers rate the health of the industry at 6.8, followed by manufacturers at 6.7 and designers at 6.6.
Finally, while 33% of NKBA members have had to raise prices, another third are offering different products as a result of trade issues, driving business to domestic brands, as well as put higher-quality American-made products in the same price range as entry-level imports. Engineered quartz countertops and entry-level kitchen and bath cabinetry have been particularly affected, the study notes.
And NKBA’s recent technology research findings show 60% of homeowners want technology in their master bathroom. NKBA reports while 60% of consumers feel technology is essential in the master bathroom, 60% of designers and 68% of technology pros do not, demonstrating a significant gap between consumer knowledge and use as compared with trade professional awareness of consumer knowledge and use of technology.
The findings also show homeowners are savvy about their desire for smart plumbing devices such as automatic temperature adjustment (69%), hands-free or touch-free faucets (64%), water leak alerts to mobile devices (63%), hands-free/touch-free toilet (63%) and tubs/showers that can be adjusted remotely from mobile devices (56%). Lighting controls from one location (60%) and motion-sensor lighting (59%) also are top items for homeowners.