Prospects For A Residential Sprinkler Windfall
Remember when many plumbing distributors had to scramble to supply enough product to meet the demands of an overheated housing market? Our industry can only hope and pray to be wracked by such problems again.
Well, there’s a chance of it happening for at least one product sector if and when the housing market perks up in the next couple of years. Amendment RB64-07/08 to the 2009 International Residential Code (IRC) mandates the installation of fire sprinklers in all new one- and two-family residential dwellings effective Jan. 1, 2011. A recent study by experts from a prominent fire protection engineering and consulting firm predicts the result to be a market growing from an estimated $90-100 million in 2007 to some $2.9-3.2 billion annually, inclusive of design services and installation labor.
Using data from 2007 when around 1.35 million housing starts were completed, the authors conclude that about 914,000 sprinklers were installed in new residential dwellings that year. Mainly these were in the approximately 400 scattered communities throughout the U.S. where residential sprinklers are presently required by local ordinances. The study projects that if sprinklers had been required in every new home constructed, the total would have been around 30 million sprinkler heads sold.
The IRC has been adopted in 46 states, so if the housing market were to recover by 2011 to its yearly average of around 1.6 million starts, the potential exists for some 40 million heads to go flying off supply house shelves, along with associated pumps, controls and PVF. That’s more than a forty-fold increase over the 2007 market.
Okay, time for earth reentry. Those projections are almost certainly wishful thinking. It’s still up to local jurisdictions to adopt this section of the code, and home builders are putting up a fierce fight against it. The National Fire Sprinkler Association reported as of early June that builder-backed anti-sprinkler legislation was brewing in 13 states at last count, although one attempt (in Illinois) was already defeated thanks in large measure to aggressive NFSA lobbying.
The argument builders have ridden for years against residential sprinklers is that they jack up housing costs, and this resonates at a time when the housing market is trying to recover from its worst battering of our lifetime. Manufacturers and distributors so inclined can visit the NFSA Web site (www.nfsa.org) to access a link to state anti-sprinkler initiatives and contact information for joining their side of the battle.
Besides product sales, distributors ought to be looking at another angle. The study, titled “Residential Fire Sprinklers Market Growth and Labor Demand Analysis,” was more concerned about the labor requirements than materials for this burgeoning market. Their assessment in this area spells opportunity for plumbing/PVF distributors to enhance their value proposition.
The authors predict a severe shortage of skilled labor capable of installing all the required sprinklers - anticipating that about half of the installations will be performed by sprinkler contractors, the other half by plumbing contractors. They also foresee a short supply of people capable of designing and laying out the jobs. “Residential fire sprinkler layout is not as complex as those for commercial applications, but it is a unique skill that requires an understanding of all sprinkler system design aspects such as design criteria, sprinkler use, and hydraulic analysis,” the study notes. The authors calculate that “2,721 additional layout technicians will be required … in an industry that is woefully understaffed with qualified technicians and with no sizeable investment in the recruiting and training of fire sprinkler layout technicians.”
Contractors aren’t going to do it, they conclude. “The challenge is that today’s contractor is reticent to make even a modest investment in recruiting and training, and the industry is suffering the consequences of a short supply of qualified technicians.”
Top-notch distributors already provide engineering design services for piping, radiant heating, HVAC and various other building systems. This is simply to serve notice that there may be quite a bit more demand for such services when the IRC takes effect two years from now. Distributors can gain an edge by ramping up now to service the residential sprinkler market if and when it begins to take off.
The study’s lead author is Russ Leavitt, chairman and CEO of Telgian Corp., an international fire protection engineering and consulting firm. Collaborators included Steven Scandaliato, Telgian’s vice president of business development, and Ryan Smith, president of Fire Smarts, a marketing firm that published the study. The full study can be downloaded for free at www.residentialfiresprinklers.com.