Of the industry's three main segments — builders, servicers and retailers — those who design, engineer and construct new pools and spas are by far the most dependent on new consumers entering the market. While service and retail companies can thrive on aftermarket sales, builders largely rely on the decision to install a new pool and/or spa to keep the home fires burning.
Back in the depths of recession, many builders muddled through with repairs and minor renovations, and today, fixing and remodeling old pools remains a significant portion of the work. But a slowly healing economy has led to steady but modest gains in new pool construction over the past five years.
STEADY RISE
Anecdotally, builders report optimism for the coming year, a hopeful outlook reflected in this year's SOI Builders Survey in which a strong majority indicated they feel encouraged by their company's prospects in 2016.
When asked which factor had the greatest impact on that outlook, 37 percent cited consumer confidence, folliiowed by 22 percent who answered that the strengthening housing market was the most important market driver.
Neither response is terribly surprising given that both consumer confidence and housing statistics are improving, and both are keys in motivating homeowners to buy. According to the Conference Board, the Consumer Confidence Index in March this year was at 92.2, compared to its most recent nadir in February 2008 of 25.3.
The housing market is another bright spot with growth of 6.4 percent in 2015 combined with a projected growth of 3 to 4 percent this year, according to Kiplinger.
Also encouraging is Business Insider's report that home inventories have steadily hovered around five months (the estimated time required to sell the current inventory at the asking price). That level is believed to be optimum for both buyers and sellers. That good news, however, is tempered by the fact that home prices remain 19 percent below their pre-recession peaks.
Other factors impacting builders have been the drought in the Western U.S., the fall of fuel prices, availability of skilled or at least trainable workers and, as always, the weather.
The bottom line is that the builder segment of the pool and spa industry appears to be on a steady, if not dynamic rise, and as you'll see in the following survey analysis, builders encompass a tremendous amount of diversity.
If the survey results are any kind of reliable indication, the state of the pool and spa construction industry is working in the fertile soil of a solid market.
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