Get Ready For The 'Senior Surge'
When storm clouds brew, it’s hard to imagine sunlight breaking through. Yet sunny days inevitably follow at some point.
In that vein, if you’re bummed out by today’s economy, here’s a thought to brighten your day. Beginning around 2012, PHC contractors will begin to experience a long, sustained boost in demand for their services thanks to what’s been called the “senior surge.” Residential service firms will be the prime beneficiaries, but construction and remodeling specialists should also realize good fortune as homeowners seek to upgrade bathrooms for greater accessibility and demand rises for all manner of health-care facilities.
The senior surge is simply the flip side of the vaunted baby boom. That’s the familiar term used to describe the bulge in Americans born in the years 1946 to 1964. There are more than 76 million of us, and beginning in 2012 we will start reaching our 65th birthdays, which marks the traditional start of retirement for many folks. By the year 2030, more than 20 percent of the U.S. population will be over age 65. This has worrisome implications for government in terms of Medicare and Social Security obligations, but for people in your business the senior surge promises a windfall.
These maturing boomers are one of the most affluent demographic groups in recorded history. A study by McKinsey Global Institute, “Talkin’ ‘Bout My Generation: The Economic Impact of Aging U.S. Baby Boomers,” finds that they will be responsible for some 40 percent of all transactions in the United States in the next decade (after which their spending influence should start trailing off). The McKinsey study also pegs some 46 percent of them in a “confident” economic category, defined as well-prepared financially for the future.
Don’t over-interpret this to mean they have money to burn. Financially secure or not, most seniors live on fixed incomes and those wise enough to prepare themselves well for retirement are not inclined to go on spending sprees. By and large they will look for good value wherever they spend their money.
In this lousy economy, everyone seems to be spending less and saving more, and that goes double for people approaching retirement and concerned about their savings and investment portfolios. So you don’t see many of them opting to build, remodel or make all but essential repairs. But recovery eventually will come and with it expect an upsurge in projects that have been put off. This is true of homeowners across the board, not just seniors. However, people of advanced age are far less likely to tackle DIY projects, so an aging population works to the advantage of residential service firms in particular.
When things break or improvements are needed, they tend to look to professional contractors to do the work for them. Many plumbing and HVAC systems will need to be revamped or replaced to accommodate the needs of an aging population.
The boomer generation is noteworthy not only for its unprecedented prosperity, but for a multiplier effect that McKinsey describes this way: “Boomer women poured into the workplace at rising rates, further boosting the size of the labor force. This change was closely linked to a set of social trends: The Boomers have married and had children later in life, have divorced at higher rates, or have chosen not to marry at all. As a result, the Boomers are now divided into a larger number of smaller households than in previous generations, with fewer adults per household.” More households = more opportunities for PHC contractors.
The discussion so far is pertinent to the residential market. In the commercial sector, health-care facilities of all kinds will need to be built, maintained and revamped to accommodate an aging population.
One other factor ought to play to your advantage. Many seniors either want or will need to continue working at least part-time after reaching retirement age. This provides a large labor pool available for office work - a population of proven ability, trustworthiness and not in need of excessive pay and benefits.
Meantime, the labor pool for technicians has been expanded by our nation’s troubling unemployment rate - as well as rampant underemployment among people driven by desperation to take jobs beneath their skill level and income expectations. Many are prime prospects for trade apprenticeships.
Business conditions stink for the vast majority of you right now. But if you can withstand the rough ride for a while longer, the long-term future looks brighter than ever.