PMI continues to work on two tracks to find both legislative and technical solutions to the dilemma

Trends: demographics, environmental regulation, technology, economics and politics likely to impinge on plumbing businesses

The rest of the three-day working session focused mostly on some of the thorny regulatory issues that make today’s life difficult for plumbing manufacturers. Of particular concern are regulatory wildfires erupting in California, Massachusetts and Texas to limit water usage and chemical contaminants in plumbing products.

PMI has emphasized repeatedly to regulators that they are concerned and willing partners in their effort to protect the environment. Their plea is to allow sufficient time for engineering and production technology to catch up with the regulations, and in the context of national consensus standards that apply to all 50 states.

The most immediate concern is with California’s AB 1953, passed last year to mandate ultra-low lead levels in the manufacture of plumbing products by 2010. Plumbing manufacturers at present know of no way to mass-produce faucets and fittings with the requisite purity and at reasonable prices.

That was PMI’s message throughout last year’s legislative battle, although California’s Assembly insisted several PMI members already made products that meet the requirements. In leading up to the vote, top executives from those companies wrote letters informing proponents of the legislation and Gov. Arnold Schwartzenegger this was not the case. Legislators passed the bill and the governor signed it anyway.

A sizable coalition of construction organizations support PMI’s position. Some key assembly members reportedly have turned around to recognize it’s impossible to manufacture compliant products, and PMI lobbyists expressed guarded optimism that a subsequent legislative solution may be attainable. However, for the moment PMI continues to work on two tracks trying to find both legislative and technical solutions to the dilemma.

Meantime, a bill has cropped up in Massachusetts resembling the California bill in mandating ultra-low levels of lead and other chemical contaminants in plumbing products. Also, a California bill lowering the national standard of 1.6 gallons per flush for toilets to 1.3 gallons has been resurrected in the California Assembly after being vetoed by the governor last year. The Texas legislature also has taken tentative steps toward lowering the flush volume of toilets sold in that state.

Trends That Make A Difference

• America’s aging population is likely to benefit plumbing contractors and the distribution channel serving them.

 

• Maturation of the Internet is leading to more informed customers than ever before, which will impact brand decisions.

 

• Housing construction will take five years to return to peak levels.

 

• Distributors will need to pay increasing attention to energy usage in their operations.

 

• Plumbing content will increase in the home, with kitchens the central gathering point.

 

• Conditions are ripening for the rise of national plumbing firms.

 

• The Big Boxes have passed their peak. Their mainstream DIY customer base is declining, and they have not succeeded thus far in the quest to acquire sufficient trade business to compensate.

Clark Ellis, a principal with FMI Corp. and head of the consulting firm’s Residential Practice section, discussed “The Culture of the Emerging Workforce” and its implications for plumbing manufacturers. According to Ellis, two dominant trends are underway.

• Labor numbers and demographics are changing. A labor shortage in the pipe trades will grow more acute as aging plumbers and pipefitters retire at a greater rate than they are being replenished. Increasingly, the workforce will consist of Hispanics, and so-called Gen Xers and Millennials, whose differences in attitudes will also present challenges. Employers need to adapt with greater proficiency in Spanish and management methodologies.

 

• The decline of construction unions will require new sources of training and development, with manufacturers taking the lead.

 

• Ellis’ comments about the distribution channel will surely rub many of our readers the wrong way. Said Ellis: “Over time, distributors have added less and less value. They are running more lean. Distributors used to know where the customers are, but that’s not needed anymore. They have become more of a logistics house.”

Another presentation that had PMI members buzzing was a review of water resources by G. Tracy Mehan III, a former EPA assistant administrator for water and now a consultant with The Cadmus Group. He noted that U.S. households pay on average roughly .6 percent of income for water infrastructure, “one of the lowest rates among developed countries.”

“Water is becoming a more precious commodity, one whose value will only increase over time,” said Mehan.

This reporter also was on the program agenda at the PMI Spring Meeting, speaking on “Plumbing Industry Web Tactics.” I reviewed some of the more interesting e-commerce sites selling plumbing products, guesstimating that while Internet sales are rising, at present they probably do not amount to more than 2-3 percent of all faucet and bathroom fittings sales - the most common product categories sold online. That percentage almost certainly will rise over time, although it’s anyone’s guess how high. You can read more on this subject in subsequent editions of this magazine.

PMI’s jam-packed agenda featured numerous other programs tacking topics such as the drive toward more water efficient showerheads, improving hot water systems, succeeding in legislative and regulatory lobbying, on general technological and social trends, on blogging and on the importance of getting one’s “green” message across by a public relations professional.

PMI meets twice a year. Its Fall Meeting will be held Oct. 7-10 in Washington, D.C. Visit www.pmihome.org for more information.