Does anybody else feel like 2022 just flew right by, or is it just me? It seems too early for Christmas decorations and music — just a few short weeks ago, Michigan was still having 70-degree weather! But ‘tis the season!
As the end of 2022 draws close, it’s time to reflect on all the wins and failures of the past year, and plan ahead for the future. The last few years have been plagued with uncertainty, mostly because of challenges arising from the COVID-19 pandemic, and 2023 will be no different.
High inflation, rising interest rates, supply chain woes and the labor shortage will continue to impede vertical growth heading into next year. On one hand, the nonresidential construction sector is likely to be bolstered by funds from the Infrastructure Investment and Jobs Act (IIJA) and the CHIPS and Science Act of 2022. On the other hand, residential construction is anticipated to slow.
I had the chance to chat with industry experts about trends and technologies to keep an eye on in 2023. Here’s what they had to say.
Decarbonization goals driving sustainable solutions
According to Brett Boyum, vice president of marketing and offerings for Uponor North America, the industry is looking for sustainable solutions.
“With an increased focus on net-zero and carbon-neutral buildings along with water conservation and hygiene, the industry is going to be looking toward solutions that promote sustainability and human health while also providing ease of use, convenience, accessibility, and simplicity to address the trade talent shortage,” he said. “For example, the new AquaPort from Uponor, a self-contained unit that converts a building's hydronic heating supply to on-demand domestic hot water, is in perfect alignment with these trends. Ideal for multifamily and hospitality projects, the AquaPort eliminates centralized domestic hot water and recirculation piping in a structure to provide energy and water savings, improved water quality, installation efficiencies, and reduced maintenance.”
Technologies that add installation efficiencies to help with the labor shortage and provide a cost-effective, sustainable solution to contractors, engineers, builders, and building owners will see growth, he adds. “Solutions such as BIM services and prefabrication will continue to see growth due to the incredible efficiencies they provide. Also, sustainable, energy-efficient, labor-saving products, such as the AquaPort, will also see growth.”
Heat pumps are hot
The passing of the Inflation Reduction Act (IRA) of 2022 makes it the single largest investment in climate and energy in American history. The IRA includes a variety of tax credits that presents an opportunity for residential plumbing and HVAC contractors as well as their customers.
Goncalo Costa, vice president of regional business unit for Bosch Thermotechnology, believes the heat pump segment will see the most growth in 2023.
“The rise in adoption rates is a clear trend we have already seen, but with IRA rebates, families can get up to $8,000,” he says. “In that segment, the inverter compressor technology is enabling a lot of that growth directly because of how it delivers even higher levels of efficiency. Plus, the price point for inverter compressors is coming way down, which makes it available in more tiers of heat pumps. This technology enables heat pumps to operate at low ambient temperatures — as low as minus-15° F — allowing them to directly replace gas furnaces in more northern climes than ever before.”
Mark Chaffee, vice president, of governmental affairs and commercial and industrial product management at Taco Comfort Solutions, adds that the federal government — along with some state and local governements — are the driving forces behind the electrification movement. “Billions and billions of dollars will be invested in this forceful trend over the next several years," he says. "This has greatly impacted all facets of the fossil fuel industry. Areas of growth will be electric technologies, like Taco’s System M air-to-water heat pump, all facets of solar energy, storage (both thermal and electrical), as well as all other alternative energy sources.”
Taco’s System M just won the 2023 AHR Expo Innovation Award for Sustainable Solutions. (Read more about this product in Dave Yates' column this month.)
“We take great pride in this,” Chaffee says. “The technology is an air-to-water heat pump for heating, cooling and domestic hot water production. It’s a perfect fit for homeowners who want to reduce their carbon footprint. The incentive for the development of System M began several years ago, before ‘beneficial electrification’ and ‘decarbonization’ became household terms, and before the U.S. government’s real push in support of electric (non-fossil fueled) HVAC systems. System M is the result of Taco’s alliance with German partner, Glen Dimplex. Together, our experts developed a radically innovative, packaged appliance that responds to the increasing HVAC electrification and efficiency trends while providing superior comfort, high efficiency and ease of installation. With just six pipe connections, the heat pump provides up to 44,000 Btu/h, 3 1/2 tons of cooling and has a max COP of over 4.”
Bath and kitchen
According to an October 2022 study from Houzz, the vast majority of homeowners are moving forward with their home improvement projects. Only 1% of homeowners report having canceled a home improvement project in 2022. Meanwhile, 37% of respondents completed a project in 2022 and nearly one-quarter (23%) are planning to start a home improvement project in the next 12 months.
The study finds that among those planning to start renovations in the next 12 months, 67% want to stay in their current home/lot rather than buy a new home that fits their current needs. More than half of this group will kick off their project in January 2023 or earlier (58%), with top projects including bathrooms (37%) and kitchens (33%). The planned median spend on these projects is $25,000, meaning half of homeowners plan to spend more than that amount, while the other half has a smaller budget in mind. This trend presents an opportunity for plumbing contractors to become the professional of choice to help them achieve their remodeling and aging in place goals. (Don’t miss Matt Michel’s column this month on tips to help contractors meet the increasing demand for aging in place.)
Trey Northrup, leader of LIXIL Americas, notes that kitchen and bath products promoting health and sustainability will continue to drive innovation in the market.
“In commercial markets, leading manufacturers are developing newer IoT-enabled products for public restrooms, providing a significant runway for growth,” he says. “The IoT-enabled restrooms offer widespread benefits from a health and sustainability perspective and hence will continue to be in demand. Additionally, demand for touchless plumbing products will continue to grow — not just in kitchens, but in the bathroom as well. Higher price points previously limited the growth of touchless technology, but private-label brands are driving prices down across the industry. Higher adoption of touchless faucets will lend itself as the necessary jumping off point for the development of additional functionalities, such as voice and app-controlled fittings.
Another area of growth in the bath and kitchen market is above-floor technology, according to Regis Saragosti, CEO of SFA Saniflo North America.
“Above-floor technology in the plumbing segment will still be a great alternative solution to embrace during the potential recession,” he says. “Contractors, homeowners, building owners, and project managers will search for solutions that will spare them valuable time while lessening overall costs. Installers will look to cut costs and get more jobs by offering efficient, time-saving and affordable plumbing solutions.
“Any technology that will help contractors be more efficient while saving time and money for the end-user, is vital and, indeed, poised for growth in 2023,” he adds. “That said, time- and money-savings always go along with ensuring a top-quality product and outstanding customer service.”
Northrup also points to water filtration as another piece of technology poised for growth in 2023.
“More manufacturers are launching filtered water solutions — kitchen faucets, bar faucets, multi-function faucets or under counter filtration systems — in response to increasing water quality issues across many regions in the United States,” he says.
According to the 2021 Water Quality Association (WQA) Opinion Study, 38% of respondents indicated they were concerned or very concerned about the quality of their household water supply. As we slowly recover from the pandemic, concerns about contaminants and desire for a healthy lifestyle are considered the most important factors influencing the decision to purchase a water filtration product. About a quarter of those who do not have water filtration in their homes said they are likely to install products in the near future, with 10% saying the possibility was very likely. Almost half of the households (46%) have a refrigerator with a filtered drinking water dispenser, and 22% have a whole-house filter system.
I had the opportunity to speak briefly with Glen Blavet, founder and CEO of Halo Water Systems, during PHCCCONNECT2022. Given the possibility of a recession looming over us next year, Halo Water Systems has started a leasing program for its water filtration equipment. Blavet calls it, “worry-free water,” and says companies will need financing options to keep the doors open.
“I tell people all the time, you can be a filtration system or you can buy a filtration system,” he says.
I expect we will begin to see many more leasing options like this going forward, if, in fact, a recession does hit. Either way, plumbing and HVAC contractors must position themselves for success in the new year, and capitalizing on these trends and new technologies provides a way forward to that goal.
For more information on what to expect heading into next year, don’t miss our 2023 plumbing industry forecast.
Lastly, I want to wish you all a wonderful holiday season, whatever it is you celebrate, and a safe and Happy New Year! Looking forward to seeing you all in 2023!