As smart plumbing and energy efficient plumbing become more popular, we expect to see price increases and plumbing industry growth in 2023.
2022 was a great year for plumbing. While other industries saw business decline due to increasing interest rates and inflation, plumbing still saw profit. The demand for plumbers continues to grow, although there is still a skilled labor shortage.
Over the past year, we’ve seen an increased interest in greywater plumbing and tankless water heaters. Customers are still looking to save money, and we expect similar plumbing trends in 2023. Let’s take a closer look at the year ahead.
1. THE PLUMBING INDUSTRY WILL GROW
Record-high inflation and rising interest rates slowed the economy at the end of 2022. In November, Bankrate reported that 53% of Americans were putting off major purchases to make ends meet. So, what does this mean for your plumbing business?
Though other industries may slow down in 2023, the new year will likely bring plumbing industry growth. High mortgage rates are discouraging people from buying homes right now. The average home in 2020 cost $536,511 with a 30-year mortgage, according to Forbes. With the current rates, that same home would cost more than $1 million with a 30-year mortgage.
To wait out the housing market, more homeowners want to renovate their current homes into their dream homes. Seniors will also be looking to make their homes more accessible. Plumbing projects like kitchen and bathroom remodels are much more affordable than buying a new home.
HomeAdvisor estimates that installing a new shower costs about $6,800 on average. But adding upgrades like marble tile or a roll-in shower costs even more, and homeowners may think they can’t afford all the bells and whistles they’re looking for.
This is where offering financing can be a job-saver. For instance, FTL Finance has a project estimator tool that lets you present your customers with different proposals based on the upgrades they want. The tool quickly calculates how much each project would cost per month based on loan terms and rates. Seeing the total cost broken up into smaller monthly payments helps homeowners view upgrades as just as affordable as smaller projects.
2. SMART PLUMBING AND ENERGY EFFICIENT PLUMBING WILL BE MORE POPULAR
Over the past decade, smart devices have become a part of everyday life. We take them everywhere in our pockets; even if we aren’t on our phones, we can’t escape smart technology. Smart assistants are in our houses, cars, and even refrigerators. It’s no surprise we’re also seeing smart technology in plumbing trends.
It’s time to embrace new plumbing technology if you haven’t already. As millennials and Gen Z become homeowners, smart home technology will become increasingly popular. Some of this technology is just for convenience, like touchless faucets and bidets. But some smart plumbing technology is helpful for both you and your homeowners.
For instance, water tank monitors can detect leaks before the homeowner has serious issues, saving you time and the homeowner money. Whether for convenience or practicality, though, the demand is there. In fact, 89% of customers want high-end plumbing products, according to the Kitchen & Bath Market Index.
Energy efficient plumbing will also play a role in 2023 plumbing trends. In September 2022, California banned the sale of gas-powered furnaces and water heaters. Homeowners won’t have to retrofit their existing systems, but new systems will have to meet these standards starting in 2030. Talk with your homeowners about whether they want to replace their gas systems now instead of waiting until it’s required.
3. PLUMBING PRICES WILL INCREASE
Over the past few years, we’ve seen the prices of plumbing materials increase due to supply chain issues and material shortages. We’ll continue to see higher prices in 2023; manufacturers have already announced price increases averaging around 5%. Water tanks are even seeing increases as high as 14%.
As a business owner, you may have avoided passing these price increases on to your customers. You’re not alone – 50% of surveyed plumbers say that cash flow is their biggest issue in the industry. It doesn’t have to be, though.
Consider both the plumbing materials price increase and the current cost of living when you set your pricing for 2023. Then add a little extra padding to your prices to give yourself and your employees a raise. Remember our earlier advice about leading with monthly payment options? It helps reduce sticker shock and prevent price objections, too.
Of course, you’ll want to choose your financing partner carefully. With FTL Finance, homeowners won’t have to worry about increasing interest rates over the term of their loan, unlike credit cards or other loans. We offer fixed-rate installment loans, so the rate they agree to when they sign their loan is what they’ll pay for the entire term. Our loans don’t have prepayment penalties, either, so they can pay it off as soon as they want. To make payments more affordable for your customers, learn more about our financing options.