Published Date 7/11/2024
Just a few years ago, when Americans were banished from offices and few took plane rides for pleasure or business, they began to pay attention to what surrounded them every single day. Their homes and backyards would become their havens, serve as backdrops to remote work, and perhaps even installing a pool might have saved their family’s sanity for a while.
While Americans are still splashing in those “pandemic pools,” few will dig that ginormous hole in the ground this year. According to CNBC’s Davis Giangiulio, recent signs show demand is slowing as households with spending money are slapping it down on vacations instead of renovations.
He reports that a major national pool equipment distributor said last week it expects new pool construction to fall by 15% to 20% this year. And local contractors across the country will feel the pinch as well.
2022 is evidently the year the slide began, according to Giangiulio, saying that if 2023 wasn’t already bad enough, pool companies are trying to adapt to this being a sign of what’s to come. “While consumers aren’t cutting back on overall record spending, those with extra money in their budgets are increasingly burning it on experiences like travel, dining out and other service-sector purchases,” he says.
Travel is definitely back, as airlines and hotels are already experiencing a strong travel season with record bookings for cruises, sporting events and concerts, even though prices are still high. “By contrast, nonessential household purchases are cooling off amid higher food costs and the Federal Reserve’s push to tame inflation by keeping interest rates elevated — triggering a long stretch of steep mortgage and credit card rates,” says Giangiulio.
With home values leveling off, other makers of backyard appointments are feeling the slowdown as well. Traeger Grills reported declining revenues in the first quarter, part of a trend that began early in the post-pandemic recovery. Big box stores that rely on Americans’ appetite for home upgrades are still adjusting to leaner times as well.
Back in 2020 homeowners simply realized they were going to be at home for a while, and the “staycation” got true footing. Pool companies and suppliers actually struggled to keep up with a crush of orders and contractors facing months-long backlogs, and home remodelers were slammed.
No need to lament pool companies going out of business, however. They are still doing well, having accounted for rising materials prices with higher pool installation pricing. They will admit, however, that the crush of work during the pandemic helped lay a foundation to weather this slowdown. For example, Giangiulio reports that one pool company admitted that it rolled out an online calculator to help potential clients estimate the costs of their projects as well as a new pool care division that offers maintenance services after installation. Another pointed to a silver lining in the slowdown: After so many households recently built new pools or upgraded existing ones, there’s higher demand for upkeep services.
Climate change and consistently long, hot summers also seems to be adding to future prospects for pool companies as well, with some consumers beginning to see swimming pools as more of a must-have, with lines being blurred between luxury and real need.
CNBC, TBWS
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
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Mortgage Goat LLC
130 N Preston rd #318, Prosper TX 75078
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NMLS: 258527
Cell: 469-628-4544
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