By Diane M. Calabrese / Published December 2019
Change fuels commerce, and commerce propels change. Change encompasses not just new products or improved products, but also ways of using the products, methods for delivering products, and ever-expanding geographic reach. As more buyers in more places adopt an industry sector’s products, they see more possibilities for how the products might be modified and perfected. Manufacturers take it from there.
We hear concerns often that the availability of pressure washers to do-it-yourselfers will diminish opportunities for contractors and distributors, but evidence to the contrary is strong. There’s quantitative evidence (discussed below). There’s also qualitative evidence.
DIY buyers of pressure washers are no more likely to displace power washing contractors than DIY buyers of paint brushes and paint are likely to replace house painters. Rather, a large number of them are likely to see the benefits of using a machine for cleaning and decide that an investment in a professional contractor makes sense.
In turn, contractors who want excellent service, expert advice, and fast access to information and supplies will continue to frequent distributors. Distributors also have the option of carrying products designed for the DIY buyer. In doing so, they follow the lead of some of the biggest manufacturers in our industry, which are offering such machines.
The promise of robust economic activity in 2020 is great. Our industry can be expected to be right in sync with that activity. The natural cycles of business will continue to churn, of course. There will be consolidation through mergers and acquisitions. There will also be new businesses that emerge.
“We at Barens Inc. are looking forward to a new chapter in our growth as we become a part of the BE Power Equipment group of companies,” says Dave Hildebrand, general manager at the Seneca, PA, company. “In addition to the excellent product lines we carry from most of the great pressure washer parts manufacturers, we will now add the BE line of products. We are excited about the potential for growth and expanding our parts and accessories.”
In fact, as Hildebrand looks forward, he sees the industry as a strong one, poised to be even stronger. Conditions for business are good, and he hopes they will continue to be so.
“If there is one wish I would have for our industry, as well as all others in the United States, it is that the current business climate continue for years,” says Hildebrand. “Our industry is growing with many new vendors, dealers, and end users as the need for pressure washers and components continues to grow.”
One way to gauge the strength of our industry is to consider the interest of entities that track market trends. In 2019, forecasting groups that collate and measure past results to predict what happens next issued some bright reports.
Report Buyer (PR Newswire, May 6, 2019) predicts the global pressure washing market to reach some $3 billion in revenue by 2024. One factor contributing to the growth, according to the release, is the receptiveness of buyers to green technology and the industry’s response to that receptiveness by designing machines that reduce both water use and carbon emissions.
Transparency Market Research (PR Newswire, May 13, 2019) points to countless opportunities for growth in the pressure washer market. One of the interesting ties the release cites begins with the number of passenger cars being put in service to carry paying customers. The cars must be kept clean. More car washing means more car wash services, etc.
Both Report Buyer and Transparency Market Research sell the complete reports on which their news releases are based. See PRNewsire.com.
Research Reports (The Expresswire, October 10, 2019) recently announced the availability of a report on 2019 pressure washer markets, which includes analysis of trends and opportunities. A highlight of the report in the news release: The pressure washer market is expected to grow at a CACG [compound annual growth rate] of 4.14 percent in the interval 2017-2021. The entire report can be purchased via www.360researchreports.com.
Are there constraints on growth? There are always constraints on growth. But in a Reportlinker news release (PR Newswire May 14, 2019), there’s a reminder about how environmental concerns push innovation even as they (however briefly) restrict a market—as approaches and machines are modified to meet both current and frequently updated regulations.
Because of the ubiquity of equipment comparisons of pressure washers by publications such as DIY, consumer, and gardening magazines, even first-time buyers of pressure washers arrive at a distributor with firm ideas about what they want to buy. Savvy distributors are searching (and setting up alerts) for reviews on the pressure washers they sell so that they can be ready to respond to questions and further amplify information in the reviews. Manufacturers are doing the same.
Customers arriving with more information is a good thing. It provides a foundation for discussion. As always, however, customers who are shopping only on price may benefit from reminders about how additional features, longevity or performance are coupled with higher priced machines.
Many reports and reviews highlight what they label as top manufacturers in the market or suggest tiers for manufacturers. Manufacturers may want to review how they are being ranked. If ranking is done by volume of sales and a manufacturer designs and sells specialty equipment only, the ranking can mislead those reading reports and reviews. And the manufacturer—and allied distributors—should be able to add supporting information so a customer understands why one machine type does not fit all users.
The U.S. economy is doing very well. We have come a long way from 2008–2009 when businesses were closing, unemployment was high, and banks teetered.
The Bureau of Labor Statistics (U.S. Department of Labor) issued a release on September 19, 2019, summing up the year to date (we write in early October). Jobs were plentiful, with 7.2 million openings across the country on the last day of July 2019. The openings are good news for job seekers, but they do make it more difficult for companies to hire and retain employees.
In the month ending July 2019, job openings in wholesale trade and federal government declined, while openings in information, mining, and logging increased.
The BLS cautions that month-to-month changes in number of job openings is part of the ebb and flow of business. Its estimates are based on a sample of businesses drawn randomly.
The U.S. Bureau of Economic Analysis aims to provide statistics that businesses can use as they formulate plans. The most recent BEA statistic should provide confidence that economic activity and business climate remain strong. All notes that follow in this section were extracted from the most recent BEA report at www.bea.gov/news/glance.
Although gross domestic product increased at a slower rate after the first quarter of 2019, when it increased at 3.1 percent, it has remained at or above 2 percent since then. States vary in their level of activity, although all had a positive change in real GDP. Among states with increases below two percent were Hawaii, Maryland, and Mississippi. Texas is the only state with a percent change greater than five percent (5.1) in the interval.
Personal income increased by 0.4 percent in August 2019, and wages and salaries increased 0.6 percent in the same month. Texas registered the greatest percent change in personal income. Nationwide, counties in which personal income increased (2,787) outnumbered those in which it decreased (318) by nearly 9 to 1. (Personal income was unchanged in eight counties.)
The BEA statistics generally support the arguments of those who are optimistic and those who are cautious. As a business owner looking ahead to 2020, a manufacturer, distributor, or contractor should be both. Variations in regional economies most seriously affect owners who sell only in one region.
Many concerns that owners have derive from big picture, macro-statistics. U.S. liabilities continue to be more than U.S. assets. The monthly trade deficit increased from $54 billion to $54.9 billion in August 2019. A brighter spot was the services surplus ($19.5 billion), although it decreased $0.1 billion in the same month.
Foreign investment in U.S. companies is predominantly through acquisitions with dollars for expansions being far fewer. That has not changed in 20 years or more.
On October 9, 2019, The Conference Board updated its economic forecast for 2020 at www.conference-board.org/data/usforecast.cfm. It predicts growth will remain “relatively firm” but slow to two percent overall in 2020. Although it cites “robust” consumer confidence, it is not sanguine about business confidence and the sentiment of manufacturers. See the link to the forecast to draw independent conclusions.
Should members of our industry look at the forecast as partly sunny or some-what cloudy? Partly sunny is the reasonable approach. BLS and BEA indicators give plenty of support to the assessment that business climate will continue to be good for our industry. Consumers will be able to spend for services, and contractors who provide those services will require equipment. There are good reasons to be positive.